U.S. SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-QSB


(Mark One)[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2007

OR


[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FORTHE TRANSITION PERIOD FROM ______________ TO ______________

COMMISSION FILE NUMBER: 0-49648CONTINAN COMMUNICATIONS, INC.(Exact Name of Company as Specified in its Charter)




Nevada
73-1554122(State or Other Jurisdiction of Incorporation
(I.R.S. Employeror Organization)
Identification No.)




4640 Admiralty Way, Suite 500, Marina del Rey, California 90292(Address of Principal Executive Offices)(310) 496-5747.(Company's Telephone Number)______________________________________________________________(Former Name, Former Address, and Former Fiscal Year, if Changed Since Last Report)


Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of theSecurities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Company was required tofile such reports), and (2) been subject to such filing requirements for the past 90 days.  Yes    X  No    .Indicate by check mark whether the Company is a shell company (as defined in Rule 12b-2 of the Exchange Act): YesNo    X.As of September 30, 2007, the Company had 32,675,172 shares of common stock issued and outstanding.Transitional Small Business Disclosure Format (check one): Yes      No    X






TABLE OF CONTENTS




PART I - FINANCIAL INFORMATION
PAGEITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 2007
3CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREEAND NINE MONTHS ENDED SEPTEMBER 30, 2007 ANDSEPTEMBER 30, 2006, AND FOR THE PERIOD OF INCEPTION(SEPTEMBER 16, 2002) TO SEPTEMBER 30, 2007
5CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY FOR THE PERIOD OF INCEPTION(SEPTEMBER 16, 2002) TO SEPTEMBER 30, 2007
7CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007 AND SEPTEMBER 30, 2006, ANDand FOR THE PERIOD of INCEPTION(SEPTEMBER16, 2002) TO SEPTEMBER 30, 2007
10NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
13ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS
33ITEM 3.  CONTROLS AND PROCEDURES
46PART II - OTHER INFORMATIONITEM 1.  LEGAL PROCEEDINGS
47ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
47ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
48ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
48ITEM 5.  OTHER INFORMATION
48ITEM 6.  EXHIBITS
49SIGNATURES
49




2




PART I - FINANCIAL INFORMATIONITEM 1.  FINANCAL STATEMENTS.

CONTINAN COMMUNICATIONS, INC.(A Development Stage Company)CONSOLIDATED BALANCE SHEETSEPTEMBER 30, 2007(Unaudited)




ASSETSCurrent assets:Cash

$                   1,058Other receivables

--Prepaid expense

--Total current assets

1,058Furniture and Equipment, net

27,873Other Assets:Intangible assets, net

56,645Developed software, net

508,652Security deposit

3,595Total other assets

568,892Total assets

$             597,823LIABILITIES AND SHAREHOLDERS' DEFICITCurrent liabilities:Accounts payable

$               155,871Accrued liabilities

114,579Accrued interest on notes payable - related party

42,555Accrued interest on notes payable

21,533Accrued management fees

280,910Current portion of capital leases

4,707Notes payable - related party

232,610Notes payable

87,586Income tax payable

800Liability for derivative instruments

579Total current liabilities

941,730Long term liabilities:Capital leases, net of current portion

1,859Shareholders' deficit:Preferred stock, par value of $0.001; 10,000,000 shares authorized8,219 issued and outstanding

8Common stock; par value of $0.001; 100,000,000 shares authorized32,675,172 issued and outstanding

32,676Additional paid in capital

7,215,122Deficit accumulated during the development stage

(7,593,572)Total shareholders' deficit

(345,766)Total liabilities and shareholders' deficit

$         597,823




See Accompanying Notes to Consolidated Financial Statements




3




CONTINAN COMMUNICATIONS, INC.(A Development Stage Company)CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)




Three MonthsEnded September
30,

Nine Months
Ended September 30,

Period from September 16, 2002
(Inception) toSeptember 30, 20072007

2006

2007

2006




Revenues
$                1,600

$              19,475

$                3,642

$              54,960

$            133,512Expenses:Direct costs
1,884

46,404

16,130

197,905

385,487Selling expenses
21,145

1.021,513

80,968

1,113,776

1,731,079Depreciation and amortization
14,771

17,718

48,369

47,495

188,480General and administrative expenses
245,380

849,629

782,615

1,509,616

4,354,158Total expenses
283,180

1,935,264

928,082

2,868,792

6,659,204Other income (expenses), net:Interest expense
(16,371)

(21,388)

(16,011)

(56,385)

(222,739)Other expense
--

--

(411)

(543)

(954)Gain (loss) on derivative instruments
--

381,672

1,572

381,672

(840,249)Other income
--

--

--



62Total other income (expenses), net
(16,371)

(360,284)

(14,850)

(324,744)

(1,063,880)Loss before provision for income taxes
(265,209)

(1,555,505)

(939,290)

(2,489,088)

(7,589,572)Provision for income taxes




800

800

4,000Net Loss
$         (265,209)

$      (1,555,505)

$         (940,090)

(2,489,888)

$     (7,593,572)Net loss per common share - basic and diluted
$               (0.01)

$               (0.87)

$               (0.03)

$               (2.36)

$               (0.29)Basic and diluted weighted average common shares outstanding (1)
30,517,805

1,796,385

27,447,920

1,053,506

25,851,485


(1)  Adjusted for a 1 for 20 reverse split effective on December 1, 2006.

See Accompanying Notes to Consolidated Financial Statements




4




CONTINAN COMMUNICATIONS, INC.(A Development Stage Company)CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITYFOR THE PERIOD FROM SEPTEMBER 16, 2002 (INCEPTION) TO JUNE 30, 2007(Unaudited)




DeficitAccumulatedDuring theAdditional

Development

TotalPreferred Stock

Common Stock

Paid in Capital

Stage

ShareholdersShares

Amount

Shares

Amount

(Restated)

(Restated)

Equity (Deficit)Balance at inception (September 16, 2002)
--

$            --

--

$               --

$                  --

$                    --

$                   --Issuance of common stock
3,000,000

3,000

--

--

--

--

3,000Balance at December 31, 2002
3,000,000

3,000

--

--

2,123,608

--

2,126,608Net loss
--

--

--

--

--

(167,276)

(167,276)Balance at December 31, 2003
3,000,000

3,000

--

--

--

(167,276)

1,959,332Net loss
--

--

--

--

--

(791,049)

(791,049)Balance at December 31, 2004
3,000,000

3,000

--

--

2,123,608

(958,325)

1,168,283Net loss
--

--

--

--

--

(1,359,128)

(1,359,128)Balance at December 31, 2005
3,000,000

3,000

--

--

2,123,608

(2,317,453)

(190,845)Reverse acquisition, May 2006
--

--

1,699,108 (1)

1,699

971,820

--

973,519Stock options granted for consulting services
--

--

--

--

40,343

--

40,343Stock options granted to employees
--

--

--

--

33,619

--

33,619Stock options granted to management
--

--

--

--

58,273

--

58,273Stock options granted for finders fees
--

--

--

--

37,737

--

37,737Fees on reverse acquisition
--

--

--

--

(37,737)

--

(37,737)Issue of common stockupon exercise of warrants
--

--

290,000

290

(290)

--

--Issue of common stockfor consulting service
--

--

249,500

250

548,750

--

549,000Conversion of preferred stockto common stock
(3,000,000)

(3,000)

20,250,000

20,250

(17,250)

--

--




5




CONTINAN COMMUNICATIONS, INC.(A Development Stage Company)CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITYFOR THE PERIOD FROM SEPTEMBER 16, 2002 (INCEPTION) TO JUNE 30, 2007(Unaudited)(continued)




DeficitAccumulatedDuring theAdditional

Development

TotalPreferred Stock

Common Stock

Paid in Capital

Stage

ShareholdersShares

Amount

Shares

Amount

(Restated)

(Restated)

Equity (Deficit)Conversion of notes payable tocommon stock - Rackgear Inc.
--

--

210,914

211

63,063

--

63,274Conversion of accounts payable in theamount of $12,698 to common stock
--

--

22,650

23

12,675

--

12,698Conversion of notes payable topreferred stock - First Bridge Bank
5,510

6

--

--

550,951

--

550,957Conversion of notes payable tocommon stock  - Kurt Hiete
--

--

200,000

200

60,326

--

60,526Conversion of accounts payable  in theamount of $34,865 to common stock
--

--

35,000

35

34,830

--

34,865Issue of common stockfor consulting services
--

--

2,710,000

2,710

1,623,290

--

1,626,000Stock options granted for consulting services
--

--

--

--

48,846

--

48,846Stock options granted for consulting services
--

--

--

--

215,748

--

215,748Stock options granted to employees
--

--

--

--

93,236

--

93,236Transfer to derivative liability
--

--

--

--

(307,516)

--

(307,516)Net loss
--

--

--

--

--

(4,336,029)

(4,336,029)Balance at December 31, 2006
5,510

6

25,667,172

25,668

6,154,322

(6,653,482)

(473,486)Issuance of common stock forconsulting services
--

--

65,000

65

33,085

--

33,150




6




CONTINAN COMMUNICATIONS, INC.(A Development Stage Company)CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITYFOR THE PERIOD FROM SEPTEMBER 16, 2002 (INCEPTION) TO JUNE 30, 2007(Unaudited)(continued)




DeficitAccumulatedDuring theAdditional

Development

TotalPreferred Stock

Common Stock

Paid in Capital

Stage

ShareholdersShares

Amount

Shares

Amount

(Restated)

(Restated)

Equity (Deficit)Conversion of note payable topreferred stock - First Bridge Capital
150

--

--

--

15,000

--

15,000Stock options granted for consulting services
--

--

--

--

81,130

--

81,130Conversion of A/P and management feesin the amount of $602,530 to common stock
--

--

1,832,000

1,832

596,391

--

602,530Conversion of note payable and accruedInterest to preferred stock - First BridgeCapital
3,360

3

--

--

335,997

--

335,997Conversion of common stock topreferred stock
(801)

(1)

804,000

804

(803)

--

--Net loss
--

--

--

--

--

(940,090)

(940,090)Balance at June 30, 2007
8,219

$             8

32,675,172

$        32,676

$      7,215,122

$     (7,593,572)

$       (345,769)


(1)  Adjusted for a 1 for 20 reverse split effective on December 1, 2006.

See Accompanying Notes to Consolidated Financial Statements




7


7

CONTINAN COMMUNICATIONS, INC.(A Development Stage Company)CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)




Nine MonthsEndedSeptember 30, 2007

Nine MonthsEndedSeptember 30, 2006

September 16, 2002(Inception) toSeptember 30, 2007Cash Flows from Operating Activities:Net loss


$            (940,090)

$         (2,489,888)

$         (7,593,572)Adjustments to reconcile net loss to net cashused in operating activities:Depreciation and amortization

48,369

47,495

188,479Stock compensation for consulting services and options grantedto management and employees

747,808

1,148,235

3,747,857(Gain) loss on derivative instruments

(1,572)

(381,672)

579(Increase) decrease in assets:Accounts receivable

--

37,062

--Other receivables

1,758

(2,909)

--Security deposit

4,805

--

(3,595)Prepaid expenses

500

562,500

--Increase (decrease) in liabilities:Accounts payable

(291,661)

281,011

181,925Accrued liabilities

20,201

42,666

113,788Accrued interest on notes payable - related party

(11,693)

15,280

39,613Accrued interest on notes payable

1,853

22,601

24,475Accrued management fees

78,429

67,555

280,910Income tax payable

800

--

800Net cash used in operating activities

(340,493)

(650,064)

(3,018,741)




8




CONTINAN COMMUNICATIONS, INC.(A Development Stage Company)CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)




Nine MonthsEndedSeptember 30, 2007

Nine MonthsEndedSeptember 30, 2006

September 16, 2002(Inception) toSeptember 30, 2007Cash Flows from Investing Activities:Payment for intangible assets

--

(152)

(101,369)Payment for software development costs

--

(5,090)

(411,567)Purchase of equipment

(22,255)

(1,251)

(43,618)Net cash used in investing activities

(22,255)

(6,493)

(556,554)Cash Flows from Financing Activities:Increase in bank overdraft

--

8,381

--Sale of common stock

--

214,500

247,500Borrowings on convertible note payable

15,000

--

15,000Payments on note payable-related party

(849)

--

(7,677)Payments on notes payable

--

--

(7,400)Borrowings on notes payable - related party

24,801

51,696

2,671,224Borrowings on notes payable

320,000

363,500

680,986Payments on capital lease obligations

(3,856)

(7,059)

(23,280)Net cash provided by financing activities

355,096

631,018

3,576,353(Decrease) Increase -n Cash

(7,652)

(25,539)

1,058Cash, Beginning of Period

8,710

25,539

--Cash, End of Period

$                  1,058

$                         --

$                  1,058Supplemental Disclosures of Cash Flow Information:Interest paid

$                         --

$                         --

$                          -Income taxes paid

$                         --

$                     800

$                  3,200Supplemental Disclosuresof Non-Cash Investing andFinancing Activities:Furniture and equipment acquired through exchange of stock

$     
--

$                         --

$                 30,250Developed software acquired through exchange of stock

$                        --

$    
--

$                 165,000Conversion of note payable to preferred stock

$    
--

$                         --

$               550,957Conversion of notes payable and accrued interest into common stock

$    
--

$    339,367

$                 123,800Conversion of A/P and management fees into common stock

$               602,530

$                            --

$                  650,093Purchase of equipment through capital leases

$    
--

$    
--

$                  29,843Issuance of stock options for consulting services

$                81,130

$    
--

$               386,067Issuance of common stock for consulting services

$                  33,150

$    
--

$             2,208,150Stock options granted to management and employees

$    
--

$    
--

$               185,128Issue of common stock upon exercise of warrants

$    
--

$                      290

$                       290


See Accompanying Notes to Consolidated Financial Statements

9




CONTINAN COMMUNICATIONS, INC.(A Development Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)


NOTE 1 - ORGANIZATIONTexxon, Inc. was incorporated on October 6, 1998, under the laws of the state of Oklahoma.  Since inception, the Company'sprimary focus was raising capital and paying for the exclusive licenses.  Pursuant to the Company's Share Agreement withTeleplus, Inc.,the Company's focus is now centered on the development and marketing of its Multinlingual Mobile Services forinternational travelers in their native languages in collaboration with major wireless providers.In May 2006, Texxon and the shareholders of TelePlus completed a Share Exchange Agreement whereas the Company acquiredall of the outstanding capital stock of TelePlus from the TelePlus shareholders in exchange for 3,000,000 shares of votingconvertible preferred stock convertible into 81,000,000 shares of Company common stock.  This transaction constituted a changeof control of the Company whereby the majority of the shares of Texxon are now owed by the shareholders of TelePlus.  Theaccounting for this transaction is identical to that resulting from a reverse-acquisition, except that no goodwill or other intangibleassets is recorded.  As a result, the transaction was treated for accounting purposes as a recapitalization by the accountingacquirer TelePlus.  The historical financial statements will be those of TelePlus.  On November 22, 2006, Texxon, the Oklahomacorporation, for the sole purpose of re-domestication in Nevada, filed Articles of Merger with the Secretaries of state of the statesof Oklahoma and Nevada pursuant to which Texxon, the Oklahoma corporation, was merged with and into Texxon, Inc., aNevada corporation, with the Nevada corporation remaining as the surviving entity.  Immediately following the merger, theNevada company changed its name to Continan Communications, Inc. ("Company") and its articles of incorporation wereamended such that the number of common stock and preferred stock is increased from 45,000,000 to 100,000,000 and from5,000,000 to 10,000,000, respectively.  On December 1, 2006, the Company executed a 1 for 20 reverse stock split of all itsissued and outstanding shares of common stock.  Additionally, all convertible preferred stocks were converted into 20,250,000shares of common stock.NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of Presentation.As a result of the Share Exchange Agreement, the Company acquired 100% of the stock of TelePlus, Inc. and TelePlus hasbecome a wholly owned subsidiary of the Company.  The consolidated financial statements include the accounts of the parentand its subsidiary.  All significant intercompany transactions have been eliminated in the consolidation.  TelePlus wasincorporated in the State of California on September 16, 2002.The Company is in the development stage, as defined in Statement of Financial Accounting Standards ("SFAS") No. 7,"Accounting and Reporting by Development Stage Enterprises", with its principal activity being to leverage its proprietarycontent management software to deliver life enhancing, language specific, contents and services via a cellular phone.Cash and Cash Equivalents.The Company defines cash and cash equivalents as short-term investments in highly liquid debt instruments with originalmaturities of three months or less, which are readily convertible to known amounts of cash.Use of Estimates.The preparation of financial statements in conformity with generally accepted accounting principles requires management tomake estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets andliabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.Actual results could differ from those estimates.

10


Financial Instruments.Financial accounting standards require disclosure of the fair value of financial instruments held by the Company.  Fair value offinancial instruments is considered the amount at which the instrument could be exchanged in a current transaction betweenwilling parties.  The carrying amount of receivables, accounts payable, and other liabilities included on the accompanyingbalance sheet approximate their fair value due to their short-term nature.Furniture and Equipment.Furniture and equipment are carried at cost and depreciation is computed over the estimated useful lives of the individual assetsranging from 3 to 15 years.  The Company uses the straight-line method of depreciation.The related cost and accumulated depreciation of assets retired or otherwise disposed of are removed from the accounts and theresultant gain or loss is reflected in earnings.  Maintenance and repairs are expensed currently while major renewals andbetterments are capitalized.Intangible Assets.Intangible assets consist of patent application costs that relate to the Company's U.S. patent application and consist primarily oflegal fees, the underlying test market studies and other direct fees.  The recoverability of the patent application costs is dependentupon, among other factors, the success of the underlying technology.Developed Software.Developed software is carried at the cost of development and amortization is computed over the estimated useful life of thesoftware that is currently 15 years.  The Company uses the straight-line method of amortization.Impairment of Long-Term Assets.Long-term assets of the Company are reviewed annually as to whether their carrying value has become impaired.  Managementconsiders assets to be impaired if the carrying value exceeds the future projected cash flows from related operations.Management also re-evaluates the periods of amortization to determine whether subsequent events and circumstances warrantrevised estimates of useful lives.  As of September 30, 2007 management expects these assets to be fully recoverable.Income Taxes.Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financialstatement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax lossand credit carryforwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years inwhich those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of achange in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expenserepresents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred taxassets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets arereduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of thedeferred tax assets will not be realized.Revenue Recognition.The Company recognizes revenues when international travelers place a call to Company's call centers through their personalcellular phone to obtain multilingual assistance and services in their native language while traveling in foreign countries.

11


Capital Leases.Assets held under capital leases are recorded at the lower of the net present value of the minimum lease payments or the fairvalue of the leased asset at the inception of the lease. Amortization expense is computed using the straight-line method over theshorter of the estimated useful lives of the assets or the period of the related lease.Stock Based Compensation.The Company adopted SFAS No. 123 (Revised 2004), Share Based Payment ("SFAS No. 123R"). SFAS No. 123R requirescompanies to measure and recognize the cost of employee services received in exchange for an award of equity instrumentsbased on the grant-date fair value. SFAS No. 123R eliminates the ability to account for the award of these instruments under theintrinsic value method prescribed by Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued toEmployees, and allowed under the original provisions of SFAS No. 123.Earnings Per Share.SFAS No. 128, "Earnings Per Share," requires presentation of basic earnings per share ("Basic EPS") and diluted earnings pershare ("Diluted EPS").  The computation of basic earnings per share is computed by dividing income available to commonstockholders by the weighted-average number of outstanding common shares during the period. Diluted earnings per share giveseffect to all dilutive potential common shares outstanding during the period.  The computation of diluted earnings per share doesnot assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on losses.  As alldilutive securities have an antidilutive effect on 2007 and 2006 earnings per share, the securities have been excluded from theearnings per share calculation.Accounting for Options and Warrants.During the period ended December 31, 2006, the Company issued warrants and options to numerous consultants and investors forservices and to raise capital. During the period up until the recapitalization performed on December 1, 2006 (Note 1), theCompany did not have sufficient authorized shares in order to issue these options should they be exercised.  Because of the lackof authorized shares, the Company therefore needed to follow derivative accounting rules for its accounting of options andwarrants.The Company accounted for options and warrants issued in connection with financing arrangements in accordance withEmerging Issues Task Force ("EITF") Issue No. 00-19, "Accounting for Derivative Financial Instruments Indexed to, andPotentially Settled in, a Company's Own Stock."  Pursuant to EITF 00-19, the Company was to recognize a liability for derivativeinstruments on the balance sheet to reflect the insufficient amounts of shares authorized, which would have otherwise beenclassified into equity.  An evaluation of specifically identified conditions was then made to determine whether the fair value ofwarrants or options issued was required to be classified as a derivative liability.  The fair value of warrants and options classifiedas derivative liabilities was adjusted for changes in fair value at each reporting period, and the corresponding non-cash gain orloss was recorded in the corresponding period earnings.In December 2006, the Company completed a reincorporation by merger with Texxon-Nevada, which, therefore, allowed theCompany to increase its authorized preferred and common shares from 5,000,000 to 10,000,000 shares and from 45,000,000 to100,000,000 shares, respectively.At the date of reincorporation, the Company recalculated the value of its options and warrants at the current fair value, andrecorded an increase to equity and a decrease to derivative liabilities for the fair value of the options and warrants.  Thedifference between the liability and the recalculated fair value was recorded as a gain or loss.

12


Recent Accounting Pronouncements.In February 2007, the Financial Accounting Standards Board ("FASB") issued SFAS No. 159, "The Fair Value Option forFinancial Assets and Financial Liabilities-Including an amendment of FASB Statement No. 115."  SFAS No. 159 permitscompanies to choose to measure many financial instruments and certain other items at fair value that are not currently required tobe measured at fair value.  The objective of SFAS No. 159 is to provide opportunities to mitigate volatility in reported earningscaused by measuring related assets and liabilities differently without having to apply hedge accounting provisions.  SFAS No.159 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choosedifferent measurement attributes for similar types of assets and liabilities.  SFAS No. 159 will be effective in the first quarter offiscal 2008.  The Company is currently evaluating the impact that this statement will have on its financial statements.In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements," which addresses the measurement of fair valueby companies when they are required to use a fair value measure for recognition or disclosure purposes under GAAP.  SFAS No.157 provides a common definition of fair value to be used throughout GAAP that is intended to make the measurement of fairvalue more consistent and comparable and improve disclosures about those measures. SFAS No. 157 will be effective for anentity's financial statements issued for fiscal years beginning after November 15, 2007. The Company is currently evaluating theeffect SFAS No. 157 will have on its consolidated financial position, liquidity, or results of operations.Reclassifications.Certain reclassifications had been made to the 2006 financial statements to conform to the 2007 financial statement presentation.These reclassifications had no effect on net income as previously reported.NOTE 3 - GOING CONCERNThe Company has no significant operating history and, from (inception) to September 30, 2007, has generated a net loss of$7,593,572.  The accompanying financial statements for the period ended September 30, 2007 have been prepared assuming theCompany will continue as a going concern.  During the year 2006, management completed a reverse merger with Texxon Inc.and intended to raise equity through a private placement.The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverabilityand classification of assets or the amounts and classifications of liabilities that may result from the possible inability of theCompany to continue as a going concern.NOTE 4 - FURNITURE AND EQUIPMENTFurniture and equipment consisted of the following as of September 30, 2007 and December 31, 2006:

2007

2006Furniture and fixtures
$     12,272

$    12,272Computers and equipment
68,289

63,452Total
80,561

75,724Less: accumulated depreciation
(52,688)

(40,597)Machinery and equipment, net
$    27,873

$    35,127


Depreciation expense amounted to $12,091 for the nine months ended September 30, 2007 and $11,132 for the nine months ended September 30, 2006.

13


NOTE 5 - CONCENTRATION OF CREDIT RISKThe Company maintains its cash in bank deposit accounts and the balances may exceed federally insured limits from time totime.  The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on itscash in bank deposit accounts.  As of September 30, 2007, the Company did not have deposits in excess of federally insuredlimits.NOTE 6 - DEVELOPED SOFTWAREThe Company has developed internal use software for the purpose of managing its wireless network and specific services.  Thetotal capitalized cost of this software at September 30, 2007and December 31, 2006 was $593,988.  Accumulated amortizationamounted to $85,336 and $47,004 as of September 30, 2007 and December 31, 2006, respectively.  Amortization expenseamounted to $28,749 and $28,750 for the nine months ended September 30, 2007 and September 30, 2006.NOTE 7 - INTANGIBLE ASSETSIntangible assets consisted of the following at September 30, 2007 and December 31, 2006:

2007

2006Patent application costs
$    60,982

$    60,982Website development costs
40,908

40,908Network interconnection
5,300

5,300Total
107,190

107,190Less: accumulated amortization
(50,545)

(43,016)Intangible assets, net
$    56,645

$    64,174


Amortization expense amounted to $7,530 for the nine months ended September 30, 2007 and $7,613 for the nine months ended September 30, 2006.NOTE 8 - INCOME TAXESDeferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilitiesfor financial statement purposes and the amounts used for income tax purposes. Significant components of the Company'sdeferred tax assets and liabilities at September 30, 2007 are as follows:

Deferred tax assetFederal net operating loss
$  2,431,239State net operating loss
428,145Total deferred tax asset
2,859,384Less valuation allowance
(2,859,384)Deferred tax asset, net
$              --


At September 30, 2007 and September 30, 2006, the Company had federal and state net operating loss ("NOL") carryforwards ofapproximately $15,226,000 and $4,944,905, respectively. Federal NOLs could, if unused, expire in 2023. State NOLs, if unused,could expire in 2013.

14


The Company has provided a 100% valuation allowance on the deferred tax assets at September 30, 2007 and December 31,2006 to reduce such asset to zero, since there is no assurance that the Company will generate future taxable income to utilize suchasset. Management will review this valuation allowance requirement periodically and make adjustments as warranted.The reconciliation of the effective income tax rate to the federal statutory rate for the periods ended September 30, 2007 andDecember 31, 2006, are as follows:

2007

2006U. S. Federal Statutory rate
34.0%

34.0%State tax rate, net of federal benefit
6.0

6.0Less valuation allowance
(40.0)

(40.0)Effective income tax rate
--   %

--  %


NOTE 9 - RELATED PARTY TRANSACTIONSNotes Payable.The Company has received loans from related parties. These related parties consist of various members of management who arealso shareholders.  The related parties also consist of an employee, a relative of the CEO, and a shareholder of the Company. Asof September 30, 2007 and December 31, 2006, the Company had loans due to related parties of $232,615 and $193,658,respectively.  Loans due to related parties consisted of the following:

2007

2006Promissory note issued to Claude Buchert, CEO, on December 30, 2004 with interest of 10%.  Principal along with accrued interest are due on or before June 30, 2005.

$     18,809

$       5,209Promissory note issued to Edward Shirley, relative of Vice President, on February 23, 2004 with interest of 10%, with the remaining principal balance and accrued interest due on December 31, 2004.

30,000                                                                                           30,000

30,000Promissory notes issued to Humax West, Inc., shareholder, on various dates between January 26, 2006 and February 16, 2006 with interest of 10%.  Principal along with accrued interest are payable on the maturity date March 30, 2006. The amount due in 2005 contain options for the Holder to receive shares of the Company stock in lieu of repayment of principal and was converted in 2006.  The 2006 loan is non-convertible.

30,000

30,000Promissory note issued to Stephanie Buchert, relative of CEO, on May 1, 2004 with interest of 10%, with the outstanding principal balance and accrued interest due on December 31, 2004.

9,093

9,093Promissory note issued to Celine Coicaud, employee, on December 31, 2003 with interest of 10% with an additional payment of $9,900 due August 10, 2004 and the remaining principal balance and accrued interest due on December 31, 2004.

--

8,870Promissory note issued to Helene Legendre, Vice President and shareholder, on June 30, 2004 with interest of 10%, with the remaining principal balance and accrued interest due on December 31, 2004.

144,713

110,486Totals notes payable - related

$   232,615

$   193,658




15


Total interest expense for the periods ended September 30, 2007 and September 30, 2006 for related parties amounted to $10,553and $51,990, respectively.  The Company is currently in default on various notes payable and is in the process of negotiatingsettlements or payments.  All notes are included in current liabilities.Management Fees.The Company has employment agreements with two members of management through March, 2008.  These agreements arecancelable at any time by the Company or member of management.  As of September 30, 2007 and December 31, 2006, theCompany had $280,910 and $202,481, respectively, payable to management in arrears under these agreements.  Expenses relatedto these agreements are recorded in general and administrative expense and amounted to $126,737 and $100,000 for the periodsended September 30, 2007 and September 30, 2006, respectively.NOTE 10 - LEASESThe Company leases its office facility under a six-month lease beginning July 2007 requiring payments of $2,500 per month.The future minimum payments under the lease are as follows:The future minimum lease payments required under the capital leases and the present value of the net minimum lease paymentsas of June 30, 2007, are as follows:

For the YearsEndedSeptember 30,

Amount2008

$     7,500Thereafter

--7,500


Capital leasesThe Company leases certain computers under agreements that are classified as capital leases. The cost of equipment under capitalleases is included in the balance sheets as furniture and equipment and amounted to $33,173 at September 30, 2007. Accumulatedamortization of the leased equipment at September 30, 2007 was $15,613. Amortization of assets under capital leases is includedin depreciation expense.The future minimum lease payments required under the capital leases and the present value of the net minimum lease paymentsas of September 30, 2007, are as follows:The future minimum lease payments required under the capital leases and the present value of the net minimum lease paymentsas of June 30, 2007, are as follows:

Period EndingSeptember 30,

Amount2008

$     4,7072009

3,625Thereafter

--Total minimum lease payments


8,332Less:  amount representing interest


(1,766)Present value of net minimum lease payments


6,566Less:  current maturities of capital lease obligations


(4,707)Long-term capital lease obligations


$     1,859




16


NOTE 11 - NOTES PAYABLE

2006

2005Promissory note issued to James Bell on May 26, 2004 in the amount or $25,000 with interest of 10%. There are no monthly payments and the principal along with the accrued interest is due on or before December 31, 2005 or the date the Company received proceeds from the public offering of its shares, whichever is earlier. The promissory note contains an option for the holder to receive 1% of the outstanding shares in lieu of repayment of principal.

$     25,000

$      25,000Promissory notes issued to ARABIA Corporation on various dates between September 18, 2003 and May 18, 2004 with interest of 10%. Principal along with accrued interest is payable on the maturity dates between September 18, 2004 and December 31, 2004.

55,000

55,000Promissory note issued to Sax Public Relations, Inc. December 1, 2005 with interest accruing from September 1, 2005 at 10%.  Payments of $1,000 to be made monthly beginning February 1, 2006 through March 2007.

7,586

7,586Total notes payable

$     407,586

$      87,586


The Company is currently in default on various notes payable and is in the process of negotiating settlements or payments.  Allnotes payable are included in current liabilities.NOTE 12 - STOCKHOLDERS' EQUITYFollowing the completion of the reverse merger, the Company had two classes of stock.Preferred Stock.The Company has one class of preferred stock with a par value of $0.001.  The Company has 5,000,000 shares authorized andhad 3,000,000 Series 2006 preferred shares issued and outstanding.Common Stock.The Company has one class of common stock with a par value of $0.001.  The Company had 45,000,000 shares authorized and44,772,159 issued and outstanding just prior to December 1, 2006 in connection with the Company's re-domestication (see Note1).  On December 1, 2006, the Company implemented a 1 for 20 reverse stock split of all its issued and outstanding shares.  Afterthe reverse stock split, there were 2,238,608 shares of common stock issued and outstanding.  At the date of the reverse split, theCompany had 3,000,000 shares of convertible preferred stock issued and outstanding.  All preferred shares were converted into20,250,000 shares of post reverse split common stock.Prior to the reverse split, the Company had made promises to issue more common stock, but was unable to due to a lack ofauthorized shares.  Before the merger completed in November 2006, the Company was in the process of attempting to increasethe number of authorized common stock shares.  Accordingly all promises to issue common stock were classified as a liability.See descriptions of transactions below.(a) In December 2006, accounts payable to a consulting company in the amount of $12,698 was converted into 22,650 commonshares with a par value of $0.001 per share.  The Company recorded common stock in the amount of $23 and additional paid incapital ("APIC") in the amount of $12,675.  As of March 31, 2007, this agreement was finalized.  However, stock certificateswere not issued until subsequent to year-end.  As of March 31, 2007, 2006, the shares were considered outstanding.(b)  In December 2006, accounts payable to a consulting company in the amount of $34,830 was converted into 35,000 commonshares with a par value of $0.001 per share.  The Company recorded common stock in the amount of $35 and APIC in the amountof $34,795.  As of March 31, 2007, this agreement was finalized.  However, stock certificates were not issued until subsequent toyear-end.  As of March 31, 2007, the shares were considered outstanding.

17


(c) In August 2006, the Company entered into a funding agreement with First Bridge Capital Incorporated for working capitalpurposes.  First Bridge Capital will make serial investments in the maximum amount of $1,000,000 for a future exchange of theCompany's convertible preferred stock.  Before re-domestication, the Company had received $538,500 in advance payments fromFirst Bridge Capital.  However, after the re-domestication was completed, all advance payment of $538,500 and related accruedinterests of $12,456 were converted into 5,510 shares of preferred stock at year end, on the basis of 1 preferred share issued foreach $100 owed.  As of March 31, 2007, this agreement was finalized.  However, stock certificates were not issued untilsubsequent to year-end.  As of March 31, 2007, the shares were considered outstanding.In January 2007, First Capital issued a note in the amount of $15,000 to the Company.  After the inception of the note, theCompany entered into an agreement with First Bridge Capital and converted the note into 150 shares of preferred stock on thebasis of 1 preferred share issued for each $100 owed.  At the date of conversion, the market price of preferred stock was $0.51.The company recorded $0.15 of preferred stock account and $14,999.85 of additional paid in capital.In connection with the funding agreement, the Company issued First Bridge Capital 50,000 (1,000,000 pre reverse split) commonstock warrants.  These warrants were valued at $20,000 as that was the cash payment equivalent of the value of services.  TheCompany accounted for these warrants as a liability for derivative instruments as they didn't have enough authorized shares toissue stock for these warrants. The Company valued these warrants at September 30, 2006 using the Black-Scholes model anddetermined that the value as of September 30, 2006 was $4,965.  Accordingly the Company recognized a gain on the change infair value of derivative instruments in the amount of $15,035 and reduced their initial $20,000 liability to $4,965.  The factorsused for the Black Scholes model were a market price of $0.05 per share; volatility of 150%; risk free interest rate of 6%;exercise price of $0.001 per share; and an estimated life of 4.8 years.As a result of recapitalization in November 2006, the Company had more shares authorized to be issued.  Therefore, thederivative liability in the amount of $4,965 arisen due to a lack of authorized shares had to be eliminated and accounted for asequity.  The value for the derivative liability needed to be re-calculated using the Black Scholes model as of December 1, 2006(the date of the reverse split).  The recalculated value of the derivative liability was $14,836, which became an addition to APIC.The remaining value of $9,871, after eliminating derivative liability, was recognized as a loss on derivative.  The factors used forthe Black Scholes model were a market price of $0.30 per share; volatility of 178%; risk free interest rate of 4.39%; exerciseprice of $.02 per share; and an estimated life of 4.55 years.(d) In January 2007, the Company issued 65,000 shares of common stock with a par value of $0.001 to Karen Dix forconsulting services provided to the Company.  At the date of issuance, the market price of the Company's common stock was$0.51 per share.  The Company recorded $65 in common stock and $33,085 in additional paid in capital.(e) In 2006, a third party exercised 290,000 (5,800,000 pre reverse-split) warrants pursuant to a settlement agreement executedon December 31, 2005.  The Company issued 290,000 shares of its common stock related to the transaction and the value wasrecorded as paid in capital.(f) In July 2006, a settlement agreement was agreed upon between the Company and a consulting group for financial publicrelations services that was performed.  The Company was to issue 7,700,000 shares of common stock for compensation for theservices performed by the consulting group.  The value of the shares on the date of issuance was based on the fair market value ofthe common shares on the date of settlement.  The Company had recorded this expense as public relations services expense in theamount of $847,000. However, the Company did not have sufficient common shares authorized and did not have sufficient un-issued shares available to settle this contract at the time of settlement. Therefore, 4,990,000 (249,500 post split) common shareswere issued to the consulting group as of September 30, 2006.  The Company still owed 2,710,000 shares to complete thissettlement.  A liability to issue the remaining shares was recorded based on the market price at the time of the settlement of $0.11per share.As of September 3, 2006, the stock price had fallen to $0.05 per share.  Accordingly the Company recognized a gain on thechange in fair value of derivative instruments of $162,600 for the three months ending September 30, 2006.  The remainingliability of $135,400 was included on the balance sheet as a liability for derivative instruments.  Following the company'srecapitalization, 2.71 million shares of common stock were issued to the consulting group on December 11, 2006.  Per thesettlement, these shares were not adjusted for the reverse split.  Therefore, the derivative liability in the amount of $135,400arisen due to a lack of authorized shares had to be eliminated and accounted for as equity.  In addition, due to changes in marketvalue for common stock, the value for the derivative liability needed to be adjusted before any changes were made as ofDecember 11, 2006.  The recalculated value for the derivative liability was $1,626,000, of which $54,200 was recognized ascommon stock and $1,571,800 was recognized as APIC.  The remaining value after offsetting derivative liability in the amount of$1,626,000 was recognized as a loss on derivative after elimination of the derivative liability.  The adjusted value of thederivative was calculated by number of shares to be issued multiplied by the market price per share at the time of issuance.

18


(g) In 2006, the Company contracted with a third party to perform public relations services that amounted to $24,000.  TheCompany agreed to pay for these services in common stock based upon the average 30 day trading price at a specified timeduring the year.  The average trading price determined was $0.29 per share, resulting in the need to issue 4,137 (82,759 prereverse split) shares of stock. The Company did not have sufficient authorized common shares available to settle this contract.Therefore a liability was accrued for the service expense incurred of $24,000. As of September 30, 2006, the price of the stockhad dropped to $0.05 per share.  Accordingly, the company recognized a gain on the change in fair value of derivativeinstruments of $19,862 for the three months ended September 30, 2006.  The remaining liability of $4,138 was included on thebalance sheet as a liability.  As of December 31, 2006,the market value of derivative liability was $2,152, which was calculatedby multiplying 4,137 shares with market price on December 31, 2006 of $0.52.  The difference of $1,986 was, then, recognizedas gain on derivative, accordingly.  As of June 30, 2007, the market value of derivative liability was $496, which was calculatedby multiplying 4,137 shares with a market price of $0.14 on June 30, 2007.  The difference of $1,572 was then recognized as gainon derivative, accordingly.The Company, during the nine months ended September 30, 2007, issued 6,139,000 shares of common stock for repaymentconsiderations for accounts payable and other liabilities in the amount of $602,530.   The stock was issued at various dates duringthe nine months ended September 30 30, 2007 with market prices ranging from $0.04 to $0.22.In January 2007, First Capital issued a note in the amount of $320,000 to the Company.  After the inception of the note, theCompany entered into an agreement with First Bridge Capital and converted the note and accrued interest of $16,000 into 3,360shares of preferred stock on the basis of 1 preferred share issued for each $100 owed with $0.001 per share.  The Companyrecorded preferred stock in the amount of $3 and APIC in the amount of $335,997. In September, 2007 First Bridge capitalconverted 801 shares of preferred stock to 804,000 shares of common stock.The following schedule summarizes the total liability originally recognized, the gain (loss) during the last fiscal year, the amounttransferred to equity upon recapitalization and the remaining liability at September 30, 2007:

19




Original

Gain/(Loss)



Liabilityas of DecemberLiability

Recognized

Equity

31, 2006Promise to issue convertiblepreferred stock
$     481,382

$              --

$     481,382

$               --Settlement of 2,710,000common shares due
298,000

(1,328,000)

1,626,000

--82,579 shares due to public relations firm
24,000

23,421

--

579Common stock warrants to FirstBridge Capital
20,000

5,164

14,836

--Non-employee stock option andwarrants (Note 13)
581,157

459,166

121,991

--Total
923,157

(840,249)

1,762,827

579Grand Total
$  1,404,539

$  (840,249)

$2,244,209

$            579


NOTE 13 - STOCK OPTIONS AND WARRANTS(a)	In January 2004, the Company granted an option to purchase 152,813 (3,056,250 pre reverse split) restricted shares ofcommon stock, exercisable at $1.00 ($0.05 pre split) per share, to a non-employee; this option vested in April 2004.  This optionexpires in January 2010 and was not valued at grant date.  Because the Company did not have sufficient shares authorized toissue if the option was exercised, this amount was recorded as a derivative and classified on the balance sheet as a liability forderivative instruments.  The Company revalued this option at September 30, 2006 using the Black-Scholes model and determinedthat the value of this option was $136,431.  Accordingly, the Company recognized a loss on the change in fair value of derivativeinstruments of $136,431 and increased the liability due as of September 30, 2006 to $136,431.  The factors used for the BlackScholes model were a market price of $0.05 per share; volatility of 150%; risk free interest rate of 6%; exercise price of $0.05 pershare; and an estimated life of 4.25 years.As a result of completed recapitalization in November 2006, the Company had more shares authorized to be issued.  Therefore,the derivative liability in the amount of $136,431 arisen due to a lack of authorized shares had to be eliminated and accounted foras equity.  In addition, due to changes in market value for the common stock, the value for the derivative liability had to berecalculated using the Black-Scholes model as of December 1, 2006 (the date of reverse split).  The recalculated value for thederivative liability was $40,250, which became an addition to APIC.  The remaining difference of $96,181, after eliminatingderivative liability, was recognized as a gain on derivative. The factors used for the Black-Scholes model were a market price of$0.30 per share; volatility of 178%; risk free interest rate of 4.39%; exercise price of $1.00 per share; and an estimated life of 4years.(b)	In September 2005, the Company granted an option to purchase 40,750 (815,000 pre reverse split) restricted shares ofcommon stock (TelePlus stock options), exercisable at $1.00 ($0.05 pre reverse split) per share, to an employee that vests andexpires on January 15, 2010.  This option was exchanged for an option to purchase 45,000 restricted shares of common stock (theequivalent of a 366,750 shares Texxon stock option) issued in May 2006 and an option to purchase 30,000 restricted shares ofcommon stock (the equivalent of a 244,500 Texxon stock option).  Due to the fact that the Company has been generatingrecurring losses and also not having an active market to trade its shares, the value of these options was determined to be zero andaccordingly, no expense or paid in capital has been recorded.  The performance-based option issued to this employee was a partof a performance based stock options issuance transaction that involved other employees (see subsequent paragraph onperformance based stock options issued in May for more details on this transaction).

20


(c)	In September 2005, the Company granted an option to purchase 40,750 (815,000 pre reverse split) restricted shares ofcommon stock, exercisable at $0.02 ($0.001 pre reverse split) per share, to a non-employee; this option expires on January 15,2010.  The option was granted in exchange for consulting services valued at $40,000.  The Company has recorded consultingexpense in this amount to reflect the value of these options for the year ended December 31, 2005.  Because the Company did nothave sufficient shares authorized to issue if the option was exercised, this amount was recorded as a derivative and classified onthe balance sheet as a liability for derivative instruments.  The Company revalued this option at September 30, 2006 using theBlack-Scholes model and determined that the value of this option was $38,305.  Accordingly, the Company recognized a gain onthe change in fair value of derivative instruments of $1,695 and reduced their liability due as of September 30, 2006 to $38,305.The factors used for the Black-Scholes model were a market price of $0.05 per share; volatility of 150%; risk free interest rate of6%; exercise price of $0.001 per share; and an estimated life of 3.5 years.As a result of the recapitalization in November 2006, the Company had more shares authorized to be issued.  Therefore, thederivative liability in the amount of $38,305 due to a lack of authorized shares had to be eliminated and accounted for as equity.In addition, due to changes in market value for the common stock, the value for the derivative liability had to be recalculatedusing the Black-Scholes model as of December 1, 2006 (the date of reverse split).  The recalculated value for the derivativeliability was $11,980, which became an addition to APIC.  The remaining difference after eliminating derivative liability in theamount of $26,325 was recognized as a gain on derivative.  The factors used for the Black-Scholes model were a market price of$0.30 per share; volatility of 178%; risk free interest rate of 4.43%; exercise price of $0.02 per share; and an estimated life of3.25 years.(d)	In February 2006, the Company granted an option to purchase 65,000 (1,300,000 pre reverse split) restricted shares ofcommon stock, exercisable at $0.02 ($0.001 pre reverse split) per share, to a consultant for assistance in the share exchangebetween Texxon and TelePlus.  This option was valued at $0.10 per share.  The value of the option was calculated using theBlack-Scholes model with the following assumptions: exercise price of $0.001; share price of $0.10; risk free interest rate of6.0%; expected life of 5 years; and estimated volatility of 150%.  The Company recorded the expense and additional paid incapital in the amount of $130,000 to reflect the finder's fees expense involved in the reverse merger acquisition process.  Becausethe Company did not have enough shares authorized to issue if the option was exercised, this amount was recorded as a derivativeand classified on the balance sheet as a liability for derivative instruments.  The Company revalued this option at September 30,2006 using the Black-Scholes model and determined that the value of this option was $64,493.  Accordingly, the Companyrecognized a gain on the change in fair value of derivative instruments of $65,507 and reduced the liability due as of September30, 2006 to $64,493.  The factors used for the Black-Scholes model were a market price of $0.05 per share; volatility of 150%;risk free interest rate of 6%; exercise price of $0.001 per share; and an estimated life of 4.5 years.As a result of the recapitalization in November 2006, the Company had more shares authorized to be issued.  Therefore, thederivative liability in the amount of $64,493 due to a lack of authorized shares had to be eliminated and accounted for as equity.In addition, due to changes in market value for the common stock, the value for the derivative liability had to be recalculatedusing the Black-Scholes model as of December 1, 2006 (the date of reverse split).  The recalculated value for the derivativeliability was $19,255, which became an addition to APIC.  The remaining difference after offsetting derivative liability in theamount of $45,238 was recognized as a gain on derivative after elimination of the derivative liability.  The factors used for theBlack-Scholes model were a market price of $0.30 per share; volatility of 178%; risk free interest rate of 4.39%; exercise price of$0.02 per share; and an estimated life of 4.25 years.(e)	In February 2006, the Company issued common stock warrants to two members of the Company's then currentmanagement, and to a public relations firm.  These warrants were for purchase of 125,000 (2,500,000 pre split) restricted sharesof common stock, exercisable at $2.20 ($0.11 pre reverse split) per share.  These warrants were the only options/warrants frompre-merger Texxon to survive the completion of the share exchange agreement (see Note 1); all other Texxon warrants werecancelled.  These warrants have been valued at $275,973 ($0.1104 per share).  The value of the warrants was calculated as ofFebruary 1, 2006 using the Black-Scholes model with the following assumptions: exercise price of $0.11; share price of $0.12;risk free interest rate of 4.4%; expected life of 5 years; and estimated volatility of 150%.  These warrants were valued by Texxonprior to the merger and the effect of their issuance is included in the additional paid in capital as a result of the merger.(f)	In April 2006, the Company granted an option to purchase 36,675 (733,500 pre reverse split) restricted shares of commonstock, exercisable at $0.02 ($0.001 pre reverse split) per share, to a consultant in exchange for consulting services valued at itsfair market value for the services performed at $40,343.  Because the Company did not have sufficient shares authorized to issueif the options were exercised, this amount was recorded as a derivative and classified on the balance sheet as a liability forderivative instruments.  The Company revalued this option at September 30, 2006 using the Black-Scholes model and determinedthat the value of this option was $36,287.  Accordingly, the Company recognized a gain on the change in fair value of derivativeinstruments of $4,056 and reduced their liability due as of September 30, 2006 to $36,287.  The factors used for the Black-Scholes model were a market price of $0.05 per share; volatility of 150%; risk free interest rate of 6%; exercise price of $0.001per share; and an estimated life of 3.5 years.

21


As a result of the recapitalization in November 2006, the Company had more shares authorized to be issued.  Therefore, thederivative liability in the amount of $36,287 due to a lack of authorized shares had to be eliminated and accounted for as equity.In addition, due to changes in market value for the common stock, the value for the derivative liability had to be recalculatedusing the Black-Scholes model as of December 1, 2006 (the date of reverse split).  The recalculated value for the derivativeliability was $10,782, which became an addition to APIC.  The remaining difference after eliminating derivative liability in theamount of $25,505 was recognized as a gain on derivative.  The factors used for the Black-Scholes model were a market price of$0.30 per share; volatility of 178%; risk free interest rate of 4.43%; exercise price of $0.02 per share; and an estimated life of3.25 years.(g)	In April 2006, the Company granted an option to purchase 6,113 (122,250 pre reverse split) restricted shares of commonstock, exercisable at $0.02 ($0.001 pre reverse split) per share, each to two employees (total of 12,225 (244,500 pre reverse split)shares of common stock).  The option was valued at $13,448 ($0.11 per share).  The value of the option was calculated using theBlack-Scholes model with the following assumptions: exercise price of $0.001; share price of $0.12; risk free interest rate of6.0%; expected life of 4 years; and estimated volatility of 150%.  The Company recorded payroll expense and additional paid incapital in the amount of $13,448 to reflect the value of these options for the period ended September 30, 2006.(h)	In April 2006, the Company granted an option to purchase 75,000 (1,500,000 pre reverse split) restricted shares of commonstock, exercisable at $3.40 ($0.17 pre reverse split) per share, to an investment banking and financial advisory organization aspartial compensation for assistance in identifying suitable acquisition targets and long term funding.  This option was valued at$0.156 per share.  The value of the option was calculated using the Black-Scholes option pricing model with the followingassumptions: exercise price of $0.17; share price of $0.17; risk free interest rate of 6.0%; expected life of 5 years; and estimatedvolatility of 150%.  The Company recorded an increase and decrease to additional paid in capital in the amount of $234,000 toreflect the finder's fees expense involved in the reverse merger acquisition process.  Because the Company did not have enoughshares authorized to issue if the option was exercised, this amount was recorded as a derivative and classified on the balancesheet as a liability for derivative instruments.  The Company revalued this option at September 30, 2006 using the Black-Scholesmodel and determined that the value of this option was $61,917.  Accordingly, the Company recognized a gain on the change infair value of derivative instruments of $172,611 and reduced the liability due as of September 30, 2006 to $61,917.  The factorsused for the Black-Scholes model were a market price of $0.05 per share; volatility of 150%; risk free interest rate of 6%;exercise price of $0.17 per share; and an estimated life of 4.5 years.As a result of the recapitalization in November 2006, the Company had more shares authorized to be issued.  Therefore, thederivative liability in the amount of $61,917 due to a lack of authorized shares had to be eliminated and accounted for as equity.In addition, due to changes in market value for the common stock, the value for the derivative liability had to be recalculatedusing the Black-Scholes model as of December 1, 2006 (the date of reverse split).  The recalculated value for the derivativeliability was $18,482, which became an addition to APIC.  The remaining difference after eliminating derivative liability in theamount of $43,435 was recognized as a gain on derivative.  The factors used for the Black-Scholes model were a market price of$0.30 per share; volatility of 178%; risk free interest rate of 4.39%; exercise price of $3.40 per share; and an estimated life of4.25 years.(i)	In May 2006, the Company granted an option to purchase 26,488 (529,750 pre reverse split) restricted shares of commonstock, exercisable at $0.02 ($0.001 pre reverse split) per share, each to two members of management (total of 52,975 (1,059,500pre reverse split) shares of common stock).  Each option was valued at $58,273 ($0.11 per share).  The value of the option wascalculated using the Black-Scholes option pricing model with the following assumptions:  exercise price of $0.001; share price of$0.12; risk free interest rate of 6.0%; expected life of 4 years; and estimated volatility of 150%.  The Company recorded thepayroll expense and additional paid in capital in the amount of $58,273 to reflect the value of these options for the period endedSeptember 30, 2006.(j)	In May 2006, the Company granted an option to purchase 18,338 (366,750 pre reverse split) restricted shares of commonstock, exercisable at $0.02 ($0.001 pre reverse split) per share, to one employee.  The option was valued at $0.12 per share.  Thevalue of the option was calculated using the Black-Scholes model with the following assumptions: exercise price of $0.001; shareprice of $0.12; risk free interest rate of 6.0%; expected life of 4 years; and estimated volatility of 150%.  The Company recordedpayroll expense and additional paid in capital in the amount of $20,171 to reflect the value of this option for the period endedSeptember 30, 2006.(k)	The Company granted options to purchase 176,875 (3,537,500 pre reverse split) restricted shares of common stock toemployees on May 25, 2006 (based on performance), exercisable at $0.02 ($0.001 pre reverse split), that vest immediately.  Atthe time of grant, the Company was unable to determine whether the Company would meet the requirement needed in order togrant the options.  Due to these facts, no expense or paid in capital has been recorded.

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(l)	In July 2006, the Company contracted with a third party to perform public relations services.  The total value of the servicesto be provided was $500,000; the term of the contract was one year.  The Company granted a warrant to purchase 192,308(3,846,154 pre reverse split) restricted shares of common stock, exercisable at $0.02 ($0.001 pre reverse split) per share.  Becauseof the one-year term of the contract, the Company only recognized the grant of a warrant to purchase 961,538 shares at anexpense of $125,000.  The Company accounted for this warrant as a liability for derivative instruments as the Company did nothave sufficient authorized shares to issue if the warrant was exercised. The Company valued this warrant at September 30, 2006using the Black-Scholes model and determined that the value was $47,736.  Accordingly, the Company recognized a gain on thechange in fair value of derivative instruments in the amount of $120,226 and reduced the initial $125,000 liability to $47,736.The factors used for the Black-Scholes model were a market price of $0.05 per share; volatility of 150%; risk free interest rate of6%; exercise price of $0.001 per share; and an estimated life of 4.8 years.As a result of recapitalization in November 2006, the Company had more shares authorized to be issued.  Therefore, thederivative liability in the amount of $47,736 due to a lack of authorized shares had to be eliminated and accounted for as equity.In addition, due to changes in market value for the common stock, the value for the derivative liability had to be recalculatedusing the Black-Scholes model as of December 1, 2006 (the date of reverse split).  The recalculated value for the derivativeliability was $14,266, which became an addition to APIC.  The remaining difference after offsetting derivative liability in theamount of $33,470 was recognized as a gain on derivative after elimination of the derivative liability.  The factors used for theBlack-Scholes model were a market price of $0.30 per share; volatility of 178%; risk free interest rate of 4.39%; exercise price of$0.02 per share; and an estimated life of 4.55 years.In 2007, an additional 144,231 warrants were issued under this contract.  The Company used the Black-Scholes model to valuethese options.  The factors used were a market price of $0.79 per share; volatility of 178%; risk free interest rate of 6%; exerciseprice of $0.02 per share; and an estimated life of 4 years.  This resulted in $81,130 of additional paid in capital.(m)	In October 2006, the Company granted an option to purchase 10,000 (200,000 pre reverse split) restricted shares of commonstock, exercisable at $0.01 per share, to a non-employee; this option will expire on October 15, 2011.  This option was granted inexchange for consulting services, valued at $11,814 using the Black-Scholes model.  Because the Company did not have enoughshares authorized to issue if this option was exercised, this amount was recorded as a derivative and are classified on the balancesheet as a liability for derivative instruments.  The factors used for the Black-Scholes model were a market price of $0.06 pershare; volatility of 178%; risk free interest rate of 4.39%; exercise price of $0.01 per share; and an estimated life of 5 years.As a result of recapitalization in November 2006, the Company had more shares authorized to be issued.  Therefore, thederivative liability in the amount of $11,814 due to a lack of authorized shares had to be eliminated and accounted for as equity.In addition, due to changes in market value for the common stock, the value for the derivative liability had to be recalculatedusing the Black-Scholes model as of December 1, 2006 (the date of reverse split).  The recalculated value for the derivativeliability was $6,976, which became an addition to APIC.  The remaining difference of $4,838 after elimination of derivativeliability was recognized as a gain on derivative.  The factors used for the Black-Scholes model were a market price of $0.70 pershare; volatility of 178%; risk free interest rate of 4.39%; exercise price of $0.01 per share; and an estimated life of 4.75 years.(n)	In December 2006, the Company granted an option to purchase 70,000 restricted shares of common stock, exercisable at$0.01 per share, to a non-employee; this option will expire on December 31, 2011.  This option was granted in exchange forconsulting services, valued at $48,846 using the Black-Scholes model.  The Company recorded consulting expense and additionalpaid-in-capital in this amount.  The factors used for Black-Scholes model were a market price of $0.70 per share; volatility of178%; risk free interest rate of 4.39%; exercise price of $0.01; and a estimated lift of 5.00 years.(o)	In December 2006, the Company granted options to purchase 414,900 restricted shares of common stock, exercisable at$0.01 per shares, for consultants (one of which is James Gibson, the Company's vice president business development remaining as an advisor to the Company); these options will expire on December 31, 2011.  These options were valued at $215,748 usingthe Black-Scholes model.  The Company recorded consulting expense and additional paid-in-capital in this amount.  The factorsused for Black-Scholes model were a market price of $0.52 per share; volatility of 178%; risk free interest rate of 4.39%; exerciseprice of $0.01; and a estimated life of 5.00 years.(p)	In December 2006, the Company granted options to purchase 179,300 restricted shares of common stock, exercisable at$0.01 per share, to various employees (one of which is Ross Nordin, the Company's former chief financial officer, remaining asan advisor to the Company); these options will expire on December 31, 2011.  These options were valued at $93,236 usingBlack-Scholes model.  The company recorded consulting expense and additional paid-in-capital in this amount.  The factors usedfor Black-Scholes model were a market price of $0.52 per share; volatility of 178%; risk free interest rate of 4.39%; exerciseprice of $0.01; and an estimated life of 5.00 years.

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A summary of the status of, and changes in, the Company's stock option plan as of and for the nine months ended September 30,2007 is presented below for all stock options issued to employees and non-employees.

Nine Months Ended September 30, 2007Common Stock

Common Stock

Weighted AverageWarrants

Options

Exercise PriceOutstanding at Beginning of Year
367,308

1,304,851

$  0.68Granted
144,231

--

--Forfeited
--

--

--Exercised
--

(65,000)

--Outstanding at End of Period
511,539

1,239,851

$  0.68Exercisable at End of Period
511,539

1,062,976




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ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL        CONDITION AND RESULTS OFOPERATIONS.The following management's discussion and analysis of financial condition and results of operations is based upon, andshould be read in conjunction with, our unaudited financial statements and related notes included elsewhere in this Form 10-QSB,which have been prepared in accordance with accounting principles generally accepted in the United States.Overview.The Company is a provider of multiple assistance services to international travelers  in the traveler language through theirpersonal mobile phone and is located in Marina del Rey, California.  The Company has built platform, server and call centers  toprovide a wide array of services to mobile phone users.  The Company has strategic relationships with several service networksin the United States and  Europe.The Company is the parent company of Vocalenvision, a pioneer in the field of wireless communications.  The Company'smain role is that of a research and development incubator that endeavors to create new opportunities for its subsidiary for thecontinually evolving convergence of international GSM wireless, that create the vehicles that consistently deliver its innovative"native-language" contents and services to the end-user customer.  In addition, the Company is actively seeking acquisitiontargets to diversify the company's holdings and to strengthen the new "Continan Communications" brand.Through its Vocalenvision subsidiary, the Company offers proprietary products and services that help customerscommunicate effectively while travelling abroad.  The Company's wireless service has market potential, boasting amongst itsfeatures a "teleconcierge," who is a live operator trained to provide a variety of business-related and travel-related servicesdirectly to a customer's mobile phone.Vocalenvision has to date expended much of its efforts and funds on development of proprietary software, Beta tests inJapan and United States, as well as its WikiTouri search engine to deliver multilingual travel assistance services to the travelerand the initiation of its sales and marketing efforts.  It is uncertain about the market acceptance of its products and services thatinclude auxiliary services offered through its software-based platform and delivered to the customer's cellular phone.  TheCompany has contracted with large European international wireless provider to deliver its Multilingual Travel Assistanceservices as value added content to its customers while they roam in foreign countries.The Company is focused on the continued development and implementation of a proprietary layered communicationsarchitecture that operates in unison with conventional wireless networks in order to deliver "native-language" services to its endcustomers.The Company operates many of its own "in-network" platforms as an independent unit while using existing operator networksfrom the leading international cellular service providers to transport the customer's calls as well as deliver users "native-language" content.  The Company supplies enhanced services and on-demand information to its customers via wireless.Vocalenvision, Inc. is highly dependent upon the efforts and abilities of its management.  The loss of the services of any ofthem could have a substantial adverse effect on it. Vocalenvision, Inc. has not purchased "Key-Man" insurance policies on any ofthem.To date, Vocalenvision, Inc. has not yet had substantial sales.  It expects initial growth in its sales to come primarily fromthe private labeling of its Multilingual Travel Assistance services product which includes traveler's assistance, teleconciergeproducts, native in-language interpretation and emergency coverage through international wireless providers' existing customerchannels.  These incumbent wireless carriers view the Company's services as a value added to their own existing wireless contentand services, while maximizing the security and convenience offer to their wireless users while traveling abroad.Sales are anticipated to start in November 2007 in France, Italy, Spain and Great Britain through a major provider ofwireless services that is making the Vocalenvision services available to all of its wireless users.  It is anticipated that the serviceswill provide income to the Company but not sufficient to cover all operational expenses during the following 12 months.The Company should be able to capture a large portion of the travel market by providing its core services to a highlyuntapped market. By forming synergistic relationships with various service providers and content providers, the Company willalso be able to continue to grow revenues significantly by offering the travelers a wide array of services and content in theirnative languages.

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An additional application of the Vocalenvision service offering includes a complete "Travel Kit" product, which includes awireless telephone and SIM card.  The Travel Kit will be marketed to travelers prior to trip departure and will work in selectedinternational countries. In this model, the company is required to supply customers with temporary mobile telephones as well asproprietary SIM cards.  Vocalenvision must purchase mobile phones and SIM cards in advance and will require payment fromcustomer prior to shipment.  Thus, Vocalenvision's development of the Travel Kit product is dependent on the number oftelephones and SIM cards which it can freely distribute and that, in turn, is dependent upon Vocalenvision's available capital forthe purchase of the hardware and cards.However, a third application of Vocalenvison's existing technology envisions the distribution only of its proprietary SIMCards.  The VocalyzTM SIM cards work on many major wireless networks in the USA and Europe. The SIM card technology willtransport the international travelers calls as well as deliver users "native-language" translation assistance and teleconcierge.  Forthe sales of this service, Vocalenvision will be dependent upon travel agents, brokers, retail stores and web-based e-commerce.Because of the Company's proprietary platform technology, unique service offering, development saving cost benefits,innovative content and sales management experience, the Company believes its current business focus towards this highlyspecific travel related niche allows it to position itself as a sustainable business that will result in the company realizing positivecash flow by the fourth quarter of 2008.The Company has historically experienced operating losses and negative cash flow. The Company expects that theseoperating losses and negative cash flows may continue through additional periods.  Until recently, the Company has had a limitedrecord of revenue-producing operations but with the modified and highly realistic product deployment strategy, the Companynow believes it has a predictable, scalable revenue and business model that will be able to achieve its business plans.Results of Operations.The acquisition of TelePlus was considered to be a capital transaction in substance, rather than a business combination.Inasmuch, the transaction is equivalent to the issuance of stock by a development stage company (TelePlus) for the net monetaryassets of a public company (Texxon), accompanied by a recapitalization. The accounting for the transaction is identical to thatresulting from a reverse acquisition, except goodwill and other intangible assets were not recorded. Accordingly, theseconsolidated financial statements are the historical financial statements of TelePlus.TelePlus was incorporated in the State of California on September 2, 2002.(a)        Revenues.Revenues were $3,642 for the nine months ended September 30, 2007 compared to $54,960 for the nine months ended September30, 2006, which were the proceeds of a Beta marketing test in Japan with a CDMA cellular phones that was stopped on July2006. The decrease of $51,318, or approximately 93%, is explained by the end of the Beta test.  Revenues were $1,600 for thethree months ended September 30, 2007 compared to $19,475 for the three months ended September 30, 2006, a decrease of$17,875 or approximately 92%. The decline in revenues was largely due to the fact that the Company is still a development stagecompany.  Currently, the Company's focus has been on raising capital that is necessary to fund its operations.  In the nine monthsended September 30, 2006, the Company generated revenue largely from a test marketing study.  A similar study was notperformed in 2007 as management was focused on raising capital, developing a SIM cards adaptable to most of GSM cellularphones and positioning itself as a wholesaler to international wireless provider.Revenues for the period from September 2, 2002 (inception) through March 31, 2007 were $133,512.(b)	Direct CostsDirect costs were $16,130 for the nine months ended September 30, 2007 compared to $197,905 for the nine months endedSeptember 30, 2006, a decrease of $181,775 or approximately 92%.  Direct costs were $1,884 for the three months endedSeptember 30, 2007 compared to $46,404 for the three months ended September 30, 2006, a decrease of $44,520 orapproximately 96%.  The decrease in direct costs was primarily related to expenses incurred in the prior year for the Company'stest market study.  A similar study was not performed in 2007 as management was focused on raising capital and developing itsthree new products: (i) the wholesale of VocalyzTM products to major international wireless providers; (ii) the complete "TravelKit"; and (iii) the positioning of its SIM card with its proprietary software, delivering an array of travelers' service and adaptableto most GSM cellular phones in the U.S. and Europe.

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(c)        General and Administrative Expenses.General and administrative expenses were $782,615 for the nine months ended September 30, 2007 compared to $1,509,6161 forthe nine months ended September 30, 2006, a decrease of $727,001 or approximately 48%.  General and administrative expenseswere $245,380 for the three months ended September 30, 2007 compared to $849,629 for the three months ended September 30,2006, a decrease of $604,249 or approximately 71%.  The decrease in expenses was largely due to decreased payroll expenses asthe Company reduced the number of its employees during the quarter to reduce its expenses as much as possible.(d) 	Net Loss.The net loss for the nine months ended September 30, 2007 was $940,090 compared to $2,489,888 for the nine monthsended September 30, 2006, a change of $1,549,798 or 62%.  The net loss was $265,209 for the three months ended September30, 2007 compared to $1,555,505 for the nine months ended September 30, 2006, a decrease of $1,290,296 or approximately83%. The Company has actively tried to lower its expenses in the current year in order to have cash available to focus ongenerating revenue.  The Company's primary focus remains on raising capital and accordingly has reduced its payroll expensessolely to focus on raising capital and finalizing the development of its three new products.Factors That May Affect Operating Results.The Company's operating results can vary significantly, depending upon a number of factors, many of which are outside theCompany's control. General factors that may affect the Company's operating results include:• 	market acceptance;•	gain or loss of clients or strategic relationships;•	announcement or introduction of new services and products by the Company or by its competitors;•	the ability to build brand recognition;•	timing of sales to customers;•	price competition;•	the ability to upgrade and develop systems and infrastructure to accommodate growth;•	the ability to introduce and market products and services in accordance with market demand;•	changes in governmental regulation;•	reduction in or delay of capital spending by clients due to the effects of terrorism, war and political instability;•	valuation of derivative liabilities; and•	general economic conditions.The Company believes that its planned growth and profitability will depend in large part on the ability to promote andposition its various services and gain clients. Accordingly, the Company intends to invest in marketing, strategic partnerships anddevelopment of its client base.  If the Company is not successful in promoting its services and expanding its client base, this mayhave a material adverse effect on its financial condition and the ability to continue to operate its business.

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The Company is also subject to the following specific factors that may affect its operations:(a)	The Company May Not Be Able to Accommodate Rapid Growth Which Could Decrease Revenues and Result in aLoss of Customers.To manage anticipated growth, the Company must continue to implement and improve its operational, financial and managementinformation systems.  The Company needs to hire, train and retain additional qualified personnel, continue to expand and upgradecore technologies, and effectively manage its relationships with its major customers, end users, suppliers and other third parties.The Company's expansion could place a significant strain on its current services and support operations, sales and administrativepersonnel, capital and other resources.  The Company could experience difficulties meeting demand for its products.  TheCompany cannot guarantee that its systems, procedures or controls will be adequate to support operations, or that managementwill be capable of fully exploiting the market.  The Company's failure to effectively manage growth could adversely affect itsbusiness and financial results.(b)	The Company's Customers Require a High Degree of Reliability in Equipment and Services, and If the CompanyCannot Meet Their Expectations, Demand for Its Products/Services May Decline.Any failure to provide reliable equipment and services for the Company's customers, whether or not caused by their ownfailure, could reduce demand for the Company's services.  The Company continues to improve its services and relatedtechnology and as such, the Company does not expect negative customer response however this cannot be assured.  Negativecustomer response could impair the Company's reputation and impair its ability to make future sales.(c)	Dependence on Suppliers May Affect the Ability of the Company to Conduct Business.For the "Travel Kit" product, the Company supplies telephones to its customers that contain its own proprietary SIM cards,and which channel calls into its network via a platform, from which interpreters and concierge services are available.  TheCompany must purchase these telephones that require payment prior to shipment. Thus, the Company's growth depends on thenumber of telephones available for distribution through rentals and sales, and that, in turn, depend upon available capital for thepurchases. Often the availability of telephones at the best prices is dependent upon the Company's ability to commit to animmediate purchase and to pay immediately.  If the Company cannot buy telephones in sufficient numbers or at favorable rates,its revenues may decline or operating expenses may increase.  Should the availability of telephone be compromised, it couldforce the Company to develop alternative designs, which could add to the cost of goods sold and compromise deliverycommitments.  In such an instance, the Company would not be able to meet the needs of its customers for a period of time, whichcould materially adversely affect its business, results from operations, and financial condition.For the wholesale applications of the Vocalenvision white labeled for major international wireless providers, the Companyhas control over any third-party sub-contractor as to quality controls, and its customers.  However, the wireless providers mayloose customers, affecting  traffic sent to Vocalenvision, generating loss of revenue and subsequently affecting results fromoperations.For the part of the Travel Kit, i.e. its SIM cards sold separately, the company has limited control over any third party sub-contractors in terms of quality control. The company uses its own reliable platform, servers and technology and as such, does notexpect failures.  However this cannot be assured.  Negative technical failures could impair the Company's reputation and itsability to gain future channels of distribution.(d)	The Company Faces Some Competition in Its Market, Which Could Make It More  Difficult for the Company toGenerate Revenues.The Company's future success will depend on its ability to adapt to rapidly changing technologies, evolving industrystandards, product offerings and evolving demands of the marketplace.  For the "Travel Kit" and SIM cards, the Companycompetes for customers primarily with facilities-based carriers, as well as with other non-facilities-based network operators.Some of the Company's competitors have substantially greater resources, larger customer bases, longer operating histories andgreater name recognition than the Company has.  However the Company is working with a specific "niche market" forinternational travelers.

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•Some of competitors provide functionalities that the Company does not.  Potential customers who desire these functions andhave no need for teleconcierge services, native language translations as well as the array of services of Vocalenvision, maychoose to obtain their equipment from the competitor that provides these additional functions.•Potential customers with no need for multilanguages services may be motivated to purchase their wireless services from acompetitor in order to maintain or enhance their respective business relationships with that competitor.In addition, the Company's competitors may also be better positioned to address technological and market developmentsor may react more favorably to technological changesCompetitors may develop or offer services that provide significant (technological, creative, performance, price) or otheradvantages over the services offered by the Company.  If the Company fails to gain market share or loses existing market share,its financial condition, operating results and business could be adversely affected and the value of the investment in the Companycould be reduced significantly.  The Company may not have the financial resources, technical expertise, marketing, anddistribution or support capabilities to compete successfully.The Company believes that as the cost to the consumer for voice transmission decreases, consumers will be attracted by theadditional services available from transmission service providers.  While at the present time our interpreter and conciergeservices are relatively unique, a larger, better financed transmission service provider might decide to develop its own competitiveservices to offer to its own customer base, thereby keeping them from migrating to us.(e)	Uncertain Demand for Services May Cause Revenues to Fall Short of Expectations and Expenses to Be Higher ThanForecast If the Company Needs to Incur More Marketing Costs.The Company is unable to forecast revenues with certainty because the Company may not continue to provide services inthe future to meet the continually changing demands of customers.   The Company has refined its sales and marketing plan aswell as products in order to achieve the desired level of revenue, which could result in increased sales and marketing costs.  In theevent demand for the Company's services does not prove to be as great as anticipated, revenues may be lower than expectedand/or sales and marketing expenses higher than anticipated, either of which may increase the amount of time and capital that theCompany needs to achieve a profitable level of operations.  There is no assurance that the Company will be successful inmarketing the three new redefined services contemplated.  Although management has many years of sales experience and hasconducted an informal market research study with respect to its business, there is no assurance that the market that the companyproposes to establish will be sufficiently responsive, properly located, and demographically inclined to the type of operation theCompany is  intended to operate.(f)	The Company Could Fail to Develop New Products/Services to Compete In an Industry of Rapidly ChangingTechnology, Resulting In Decreased Revenues.The Company operates in an industry with rapidly changing technology, and its success will depend on the ability to deploynew products/services that keep pace with technological advances. The market for communications services is characterized byrapidly changing technology and evolving industry standards.  The Company's technology or systems may become obsolete uponthe introduction of alternative technologies.  If the Company does not develop and introduce new services in a timely manner, itmay lose opportunities to competing service providers, which would adversely affect business and results of operations.There is a risk to the Company that there may be delays in initial implementation of new services/products.  Further risksinherent in new product/service introductions include the uncertainty of price-performance relative to products/services ofcompetitors, competitors' responses to its new product/service introductions, and the desire by customers to evaluate newproducts/services for longer periods of time.  Also, the Company does not have any control over the pace of technologydevelopment.  There is a significant risk that rights to a technology could be acquired or be developed that is currently or issubsequently made obsolete by other technological developments.  There can be no assurance that any new technology will besuccessfully acquired, developed, or transferred.

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(g)	New Versions of the Company's Services May Contain Errors or Defects, Which Could Affect Its Ability toCompete.The Company's services are complex and, accordingly, may contain undetected errors or failures when first introduced or asnew versions are released. This may result in the loss of, or delay in, market acceptance of its products. The Company may in thefuture discover errors and additional scalability limitations in new releases or new products after the commencement ofcommercial shipments or be required to compensate customers for such limitations or errors, the result of which its business, cashflow, financial condition and results of operations could be materially adversely affected.  However, the Beta tests and testmarket the Company made successively in 2005 and 2006 may decrease the possible errors or defects.(h)	The Company's Ability to Grow Is Directly Tied to Its Ability to Attract and Retain Customers, Which Could ResultIn Reduced Revenues.The Company has no way of predicting whether its marketing efforts will be successful in attracting new customers andacquiring substantial market share.  If the Company's marketing efforts fail, it may fail to attract new customers, which wouldadversely affect business and financial results.(i)	Disruptions in or Interference with International Travel Could affect the Company's Business.The Company's core competency relates to providing interpreter and concierge services and telephony services to internationaltravelers. Therefore, any disruption or limitation on international travel could have an adverse effect on our business andrevenues.  Virtually all such disruptions arise from events beyond the Company's control, such as terrorist acts which causegovernments to limit international travel, higher fuel costs which make the costs of travel too expensive, travel restrictions,imposed because of an epidemic or pandemic, such as bird flu, or economic downturns that make fewer funds available forleisure travel.  Furthermore, the Company does not have alternate revenue sources to substitute for any such disruption orlimitation.(j)	The Company's Success Is Largely Dependent on the Abilities of Its Management.The Company's potential success is largely dependent on the personal efforts and abilities of its senior management, whichcurrently have an employment agreement with the Company.  The loss of certain members of the Company's seniormanagement, including its chief executive officer, could have a material adverse effect on its business and prospects.The Company intends to recruit in fiscal year 2007 employees who are skilled in its industry.  The failure to recruit thesekey personnel could have a material adverse effect on the Company's business. As a result, the Company may experienceincreased compensation costs that may not be offset through either improved productivity or higher revenue.  There can be noassurances that the Company will be successful in retaining existing personnel or in attracting and recruiting experiencedqualified personnel.(k)	Any Required Expenditures as a Result of Indemnification Will Result in an Increase in the Company's Expenses.The Company's articles of incorporation and bylaws include provisions to the effect that the Company may indemnify anydirector, officer, or employee.  In addition, provisions of Nevada law provide for such indemnification, as well as for a limitationof liability of the Company's directors and officers for monetary damages arising from a breach of their fiduciary duties.  Anylimitation on the liability of any director or officer, or indemnification of any director, officer, or employee, could result insubstantial expenditures being made by the Company in covering any liability of such persons or in indemnifying them.Operating Activities.Net cash used in operating activities was $340,493 for the nine months ended September 30, 2007 compared to $650,064 forthe nine months ended September 30, 2006, a change of $309,571 or approximately 48%. The primary reason for the change wasincrease in the use of stock to pay some of our vendors in the nine months ending September 30, 2007. Because the Companycould pay for services with stock, it was able to reduce the actual cash it had to spend on operating activities.

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Net cash used in operating activities was $3,018,741 for the period from September 2, 2002 (inception) through September30, 2007.Investing Activities.Net cash used in investing activities was $22,255 for the nine months ended September 30, 2007 compared to $6,493 for thenine months ended September 30, 2006.  Net cash used in investing activities was $556,554 for the period from September 2,2002 (inception) through September 30, 2007. The Company has attempted to reduce spending on asset purchases unless suchpurchases are absolutely necessary in order to reduce the amount cash the Company is spending.Liquidity and Capital Resources.As of September 30, 2007, the Company had total current assets of $1,058 and total current liabilities of $941,730, resulting in aworking capital deficit of $940,672.  At September 30, 2007, the Company's current assets consisted solely cash on hand.  As adevelopment stage company that began operations in 2002, the Company has incurred $7,593,572 in cumulative total losses frominception through September 30, 2007.The above factors raise substantial doubt as to the Company's ability to continue as a going concern. The Company'sindependent registered public accounting firm's audit report included in the Company's Form 10-KSB included explanatoryparagraphs regarding the Company's ability to continue as a going concern.The accompanying consolidated financial statements have been prepared assuming that the Company continues as a goingconcern and contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The abilityof the Company to continue as a going concern on a long-term basis will be dependent upon its ability to generate sufficient cashflows from operations to meet its obligations on a timely basis, to obtain additional financing and to ultimately attainprofitability.The Company's current cash flow from operations will not be sufficient to maintain its capital requirements for the year.Therefore, the Company's continued operations, as well as the implementation of its business plan, will depend upon its ability toraise additional funds through bank borrowings and equity or debt financing of up to $2,000,000 during the year endingDecember 31, 2007.The Company has been successful in obtaining the required cash resources by issuing stock and notes payable, includingrelated party notes payable, to service the Company's operations through the third quarter of 2007.  Net cash provided byfinancing activities was $355,096 for the nine months ended September 30, 2007 compared to $631,018 for the nine monthsended September 30,2007, a change of $275,922 or approximately 44%.  This decrease was primarily the result of not selling asmuch stock for cash and instead relying on the ability to borrow money from lenders.  Net cash used in financing activities was$3,576,353 for the period from September 2, 2002 (inception) through September 30, 2007.The Company has continued to issue stock to various vendors to make payments for services rendered.  In the nine monthsending September 30, 2007, the Company issued 6,204,000 shares of stock in payment of services valued at $635,680.  TheCompany also granted stock options for services valued at $81,130.  Of the 6,204,000 shares issued by the Company, 6,139,000shares were issued to vendors with a promise that the shares would cover a certain amount of money owed to that vendor. If thevendor is unable to sell its shares to cover the promised amount, the Company will be liable to issue more shares for the amountthat the vendor was unable to recover through the sale of stock.  Through September 30, 2007 594,500 shares had yet to be soldby the vendors that received them.  If the Company's stock price were to fall from the price the shares were originally issued at,the Company will have to issue more stock to cover the change in the stock price.  As of September 30, 2007, the Company'sstock price has fallen from the original issue price making the company liable for issuing an additional 87,000 shares of stock.The amount of this liability has not been reflected on the Company's financial statements as the true amount of the liability is notyet known as it is dependent on the vendors decision to sell their stock.Whereas the Company has been successful in the past in raising capital, no assurance can be given that sources of financing willcontinue to be available and/or that demand for its equity/debt instruments will be sufficient to meet its capital needs, or thatfinancing will be available on terms favorable to the Company. The consolidated financial statements do not include anyadjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Companybe unable to continue as a going concern.

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If funding is insufficient at any time in the future, the Company may not be able to take advantage of business opportunitiesor respond to competitive pressures or may be required to reduce the scope of the Company's planned product development andmarketing efforts, any of which could have a negative impact on business and operating results.  In addition, insufficient fundingmay have a material adverse effect on the Company's financial condition, which could require the Company to:• 	curtail operations significantly;•	sell significant assets;• 	seek arrangements with strategic partners or other parties that may require the Company to relinquish significant rights toproducts, technologies or markets; or•	explore other strategic alternatives including a merger or sale of the Company.To the extent that the Company raises additional capital through the sale of equity or convertible debt securities, dilution ofthe interests of existing stockholders may occur. If additional funds are raised through the issuance of debt securities, thesesecurities may have rights, preferences and privileges senior to holders of common stock and the terms of such debt could imposerestrictions on the Company's operations.  Regardless of whether the Company's assets prove to be inadequate to meet itsoperational needs, the Company may seek to compensate providers of services by issuance of stock in lieu of cash, which mayalso result in dilution to existing shareholders.Contractual Obligations.(a)	Capital Lease.The Company leases certain computers under agreements that are classified as capital leases.  The cost of equipment undercapital leases is included in the balance sheets as furniture and equipment and amounted to $33,173 at September 30, 2007.Accumulated amortization of the leased equipment at September 30, 2007 was $15,613. Amortization of assets under capitalleases is included in depreciation expense.(b)	Operating Leases.The principal executive offices for the Company currently consist of approximately 1,000 square feet of office space (someof which is shared use), which are located at 4640 Admiralty Way, Suite 500. Marina del Rey, California 90292.  The Companyleases this property on a six- month lease starting in July, 2007 at the current monthly rent of $2,500.(c)	Indemnities and Guarantees.During the normal course of business, the Company has made certain indemnities and guarantees under which it may be requiredto make payments in relation to certain transactions. These indemnities include certain agreements with the Company's officersunder which the Company may be required to indemnify such persons for liabilities arising out of their employment relationship,lease agreements. The duration of these indemnities and guarantees varies, and in certain cases, is indefinite.Off Balance Sheet Arrangements.Other than operating leases, the Company does not engage in any off balance sheet arrangements that are reasonably likelyto have a current or future effect on its financial condition, revenues, results of operations, liquidity or capital expenditures.Inflation.The impact of inflation on the costs of the Company and the ability to pass on cost increases to its customers over time isdependent upon market conditions. The Company is not aware of any inflationary pressures that have had any significant impacton the Company's operations over the past year and the Company does not anticipate that inflationary factors will have asignificant impact on future operations.

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Critical Accounting Policies.The SEC has issued Financial Reporting Release No. 60, "Cautionary Advice Regarding Disclosure About CriticalAccounting Policies" ("FRR 60"), suggesting companies provide additional disclosure and commentary on their most criticalaccounting policies. In FRR 60, the SEC has defined the most critical accounting policies as the ones that are most important tothe portrayal of a company's financial condition and operating results and require management to make its most difficult andsubjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on thisdefinition, the Company's most critical accounting policies include: (a) valuation of stock-based compensation arrangements; (b)revenue recognition; and (c) derivative liabilities. The methods, estimates and judgments the Company uses in applying thesemost critical accounting policies have a significant impact on the results the Company reports in its consolidated financialstatements.(a)Valuation of Stock-Based Compensation Arrangements.The Company has issued, and intends to continue to issue, shares of common stock and options to purchase shares of itscommon stock to various individuals and entities for management, legal, consulting and marketing services.  The Companyadopted SFAS No. 123 (Revised 2004), "Share Based Payment" ("SFAS No. 123R").  SFAS No. 123R requires companies tomeasure and recognize the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value.  SFAS No. 123R eliminates the ability to account for the award of these instruments under the intrinsic valuemethod prescribed by Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," andallowed under the original provisions of SFAS No. 123.  These transactions are reflected as a component of selling, general andadministrative expenses in the accompanying statement of operations.(b)	Revenue Recognition.The Company recognizes revenues when international travelers place a call to Company's call centers through their personalcellular phone to obtain multilingual assistance and services in their native language while traveling in foreign countries.(c)	Derivative Liabilities.During the year ended December 31, 2006, the Company issued warrants and options to numerous consultants and investors forservices and to raise capital. During the period up until the recapitalization performed on December 1, 2006 (Note 1), theCompany did not have sufficient authorized shares in order to issue these options should they be exercised.  Because of the lackof authorized shares, the Company therefore needed to follow derivative accounting rules for its accounting of options andwarrants.The Company evaluates the conversion feature of options and warrant indexed to its common stock to properly classify suchinstruments within equity or as liabilities in its financial statements, pursuant to the requirements of the EITF No. 00-19,"Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock," EITF No. 01-06, "The Meaning of Indexed to a Company's Own Stock," and SFAS No. 133, "Accounting for Derivative Instruments andHedging Activities," as amended.Pursuant to EITF 00-19, the Company was to recognize a liability for derivative instruments on the balance sheet to reflect theinsufficient amounts of shares authorized, which would have otherwise been classified into equity.  An evaluation of specificallyidentified conditions was then made to determine whether the fair value of warrants or options issued was required to beclassified as a derivative liability.  The fair value of warrants and options classified as derivative liabilities was adjusted forchanges in fair value at each reporting period, and the corresponding non-cash gain or loss was recorded in the correspondingperiod earnings.In December 2006, the Company completed a reincorporation by merger with Texxon-Nevada, which, therefore, allowed theCompany to increase its authorized preferred and common shares from 5,000,000 to 10,000,000 shares and from 45,000,000 to100,000,000 shares, respectively.At the date of recapitalization, the Company recalculated the value of its options and warrants at the current fair value, andrecorded an increase to equity and a decrease to derivative liabilities for the fair value of the options and warrants.  Thedifference between the liability and the recalculated fair value was recorded as a gain or loss.

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Forward Looking Statements.Information in this Form 10-QSB contains "forward looking statements" within the meaning of Rule 175 of the SecuritiesAct of 1933, as amended, and Rule 3b-6 of the Securities Exchange Act of 1934, as amended. When used in this Form 10-KSB,the words "expects," "anticipates," "believes," "plans," "will" and similar expressions are intended to identify forward-lookingstatements. These are statements that relate to future periods and include, but are not limited to, statements regarding adequacy ofcash, expectations regarding net losses and cash flow, statements regarding growth, need for future financing, dependence onpersonnel and operating expenses.Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materiallyfrom those projected. These risks and uncertainties include, but are not limited to, those discussed below, as well as risks relatedto the Company's ability to obtain future financing and the risks set forth above under "Factors That May Affect OperatingResults." These forward-looking statements speak only as of the date hereof. The Company expressly disclaims any obligation orundertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any changein its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.ITEM 3.  CONTROLS AND PROCEDURES.Evaluation of Disclosure Controls and Procedures.The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under theSecurities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed in theCompany's periodic reports filed under the Exchange Act is recorded, processed, summarized and reported within the timeperiods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management,including the Company's principal executive officer and principal financial officer, to allow timely decisions regarding requireddisclosures.As of the end of the period covered by this report, management carried out an evaluation, under the supervision and with theparticipation of the Company's principal executive officer and principal financial officer, of the Company's disclosure controlsand procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon the evaluation, theCompany's principal executive officer and principal financial officer concluded that its disclosure controls and procedures wereeffective at a reasonable assurance level to ensure that information required to be disclosed by the Company in the reports that itfiles or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC's rules and forms. In addition, the Company's principal executive officer and principal financial officer concluded that itsdisclosure controls and procedures were effective at a reasonable assurance level to ensure that information required to bedisclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to theCompany's management, including its principal executive officer and principal financial officer, to allow timely decisionsregarding required disclosure.Because of the inherent limitations in all internal control systems, no evaluation of controls can provide absolute assurance thatall control issues and instances of fraud, if any, will be or have been detected. These inherent limitations include the realities thatjudgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally,controls can be circumvented by the individual acts of some persons, by collusion of two or more people and/or by managementoverride of controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood offuture events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential futureconditions. Over time, controls may become inadequate because of changes in conditions, and/or the degree of compliance withthe policies and procedures may deteriorate. Because of the inherent limitations in a cost-effective internal control system,misstatements due to error or fraud may occur and not be detected.Changes in Disclosure Controls and Procedures.There were no changes in the Company's disclosure controls and procedures, or in factors that could significantly affect thosecontrols and procedures, since its most recent evaluation.

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PART II - OTHER INFORMATIONITEM 1.  LEGAL PROCEEDINGS.None.ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.There were no unregistered sales of the Company's equity securities during the three months ended on September 30, 2007,except as follows:In March 2006, the Company's Board of Directors approved a funding arrangement with First Bridge Capital Incorporated.Under the arrangement, First Bridge Capital advanced to the Company $80,000 for working capital purposes, for whichconvertible preferred stock was to be issued as repayment.  Under a later written agreement with First Bridge Capital in August2006, that firm agreed to make serial investments in the maximum amount of $1,000,000 for a future exchange of the Company'sSeries A convertible preferred stock (including the amounts advanced starting in March 2006).  On January 15, 2007, FirstBridge advanced another $320,000 under this agreement, none of which has been converted into shares of Series A preferredstock (previously incorrectly reported as being issued).  On July 10, 2007, the Company issued 806 shares of Series preferredstock as a conversion of the first $80,000 loan (plus accrued interest); immediately thereafter, the Company issued 806,000shares of free trading common stock upon conversion of 806 shares of Series A preferred stock.There were no purchases of the Company's common stock by the Company's affiliates or by it during the three monthsended June 30, 2007.ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.As of September 30, 2007, the Company was in default in the payment of $298,883.87 principal amount of various notes payable(related and non-related parties, as discussed in Notes 9 and 11 to the financial statements, but excluding the note payable to FirstBridge Capital) and in the payment of $62,847.91 of accrued interest.  The Company is in the process of negotiating settlementsor payments. All notes are included in current liabilities.  The Company is negotiating with the lenders to secure a conversion ofthe debt to a proposed series of convertible preferred stock; pending the resolution of this matter, the lenders are exercisingforbearance.ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.None.ITEM 5.  OTHER INFORMATION.Subsequent Events.(a)        On October 12, 2007, the Company issued 200,000 restricted shares of common stock to Kurt Hiete in connection withthe conversion of his promissory on October 1, 2006 in the principal amount of $48,500 interest in the amount of $10,611($0.295 per share).(b)        On October 12, 2007, the Company issued 35,000 restricted shares of common stock to London Trust in connection withservices rendered for the Company, valued at $34,865 (which represents the amount of an invoice for accounting work) ($0.996per share).(c)	On October 15, 2007, the Company's board of directors appointed Helene Legendre as a member of the board of directors.Ms. Legendre has been the Company's Executive Vice President since May 2006.  Ms. Legendre was named to the Company'saudit committee upon her appointment as chief financial officer on August 6, 2007.  Ms. Legendre has an employment agreementwith the Company, as discussed in a Form 8-K filed on August 10, 2007.(c)	On October 19, 2007, Ms, Legendre sold 261,000 shares of Company common stock for total gross proceeds of $8,769.60.She then loaned these funds to the Company.

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(e)        On October 24, 2007, the Company issued 200,000 restricted shares of common stock  to Jay Everingham in connectionwith marketing services provided to the Company, valued at $7,000 ($0.035 per share).(f)	On November 19, 2007, a Certificate of Designation was filed with the Nevada Secretary of State in connection with thedesignation of 10,000 shares of undesignated preferred stock.  This stock is now designated and known as "Series A ConvertiblePreferred Stock", par value One Tenth of One Cent ($0.001) (see Exhibit 4.4).ITEM 6.  EXHIBITS.Exhibits included or incorporated by reference in this document are set forth in the Exhibit Index.SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused thisreport to be signed on its behalf by the undersigned, thereunto duly authorized.

Continan Communications, Inc.Dated: November 19, 2007
/s/ Claude C. BuchertClaude C. Buchert,Chief Executive OfficerDated: November 19, 2007
/s/ Helene LegendreHelene Legendre,Chief Financial Officer




36




EXHIBIT INDEX




Number
Description3.1
Articles of Incorporation, dated March 13, 2006 (incorporated by reference to Exhibit 3.1 of the Form 10-KSB filed on May 9, 2007).3.2
Articles of Merger, dated November 22, 2006 (incorporated by reference to Exhibit 99.1 of the Form 8-K filed on December 7, 2006).3.3
By-Laws, dated October 6, 1998 (incorporated by reference to Exhibit 3.2 of the Form 10-SB filed on February 28, 2002).4.1
1998 Incentive Stock Option Plan, dated November 1, 1998 (incorporated by reference to Exhibit 10.1 of the Form 10-SB filed on February 28, 2002)4.2
2002 Non-Qualified Stock Option Plan, dated October 1, 2002 (incorporated by reference to Exhibit 4 of the Form S-8 filed on January 27, 2003)4.3
Share Exchange Agreement between the Texxon, Inc., TelePlus, Inc., and the Shareholders of TelePlus, Inc., dated March 2, 2006 (incorporated by reference to Exhibit 2 of the Form 10-QSB filed on May 22, 2006).4.4
Certificate of Designation of TelePlus Acquisition Series of Preferred Stock, dated May 8, 2006 (incorporated by reference to Exhibit 4.1 of the Form 8-K filed on June 7, 2006).4.5
Certificate of Designation of Series a Preferred Stock, dated September 14, 2007 (filed herewith)10.1
Employment Agreement between TelePlus, Inc. and Claude Buchert, dated January 1, 2004 (incorporated by reference to Exhibit 10.1 of the Form 10-KSB filed on May 9, 2007).10.2
Employment Agreement between TelePlus, Inc. and Helene Legendre, dated January 1, 2004 (incorporated by reference to Exhibit 10.2 of the Form 10-KSB filed on May 9, 2007).10.3
Addendum to Employment Agreement between TelePlus, Inc. and Claude Buchert, dated February 1, 2004 (incorporated by reference to Exhibit 10.3 of the Form 10-KSB filed on May 9, 2007).10.4
Letter of Engagement between TelePlus, Inc. and Ross Nordin, dated April 18, 2006 (incorporated by reference to Exhibit 10.4 of the Form 10-KSB filed on May 9, 2007).10.5
Settlement Agreement between Wall Street PR, Inc. and Texxon, Inc., dated July 26, 2006 (incorporated by reference to Exhibit 10.5 of the Form 10-KSB filed on May 9, 2007).10.6
Agreement for VOIP Services between TelePlus Inc. and Digitrad France SARL, dated July 27, 2006 (incorporated by reference to Exhibit 99 of the Form 8-K filed on August 14, 2006).10.7
Funding Agreement between Texxon, Inc. and First Bridge Capital, Inc., dated August 14, 2006 (incorporated by reference to Exhibit 10.7 of the Form 10-KSB filed on May 9, 2007).10.8
Settlement Agreement between Continan Communications, Inc., First Bridge Capital, Inc., and Wall Street PR, Inc., dated December 28, 2006 (incorporated by reference to Exhibit 10.8 of the Form 10-KSB filed on May 9, 2007).21
Subsidiaries of the Company (incorporated by reference to Exhibit 21 of the Form 10-KSB filed on May 9, 2007).31.1
Rule 13a-14(a)/15d-14(a) Certification of Claude C. Buchert (filed herewith).31.2
Rule 13a-14(a)/15d-14(a) Certification of Helene Legendre (filed herewith).32
Section 1350 Certification of Claude C. Buchert and Helene Legendre (filed herewith).99
Provisional Patent Application, dated September 20, 2004 (incorporated by reference to Exhibit 99 of the Form 10-KSB filed on May 9, 2007).




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CERTIFICATE OF DESIGNATIONOFCONTINAN COMMUNINCATIONS, INC.


The undersigned, Claude C. Buchert, chief executive officer, and Helene Legendre, secretary, certify that:Claude C. Buchert is the chief executive officer, and Helene Legendre is the secretary of Continan Communications, Inc., aNevada corporation ("Company").By action of the Board of Directors of the Company on September 14, 2007, at the Company's offices located at 11601 WilshireBoulevard, Suite 2030, Los Angeles, California 90025, the following resolution was adopted by unanimous written consent of theDirectors:WHEREAS, Article 5 of the Articles of Merger of the Company, dated November 4, 2006, authorizes the Company toissue Ten Million (10,000,000) shares of preferred stock, par value of One Tenth of One Cent ($0.001) per share("Preferred Stock"); andWHEREAS,the shares of Preferred Stock were authorized to be issued from time to time in one or more series as expresslyauthorized by theBoard of Directors to determine or alter the rights, preferences, privileges, and restrictions granted to orimposed on any wholly unissued class of shares or any wholly tissues series of any class of shares, and the number of sharesconstituting any unissued series of Preferred Stock as well as the designations of the series, or any or allof them.NOW, THEREFORE, BE IT RESOLVED,that the Board of Directors does hereby provide for the issue of undesignatedPreferred shares of theCompany and does hereby fix and determine the rights, preferences, privileges, and restrictions of, andother matters relating to, that series, as follows and such issue shall not require the vote of the outstanding shares of PreferredStock of the Company:Ten Thousand (10,000) shares of undesignated Preferred Stock shall be designated and known as "Series A Convertible PreferredStock", par value One Tenth of One Cent ($0.001), with the powers, preferences, rights, restrictions, and other matters as follows.(1)       CONVERSION.The holders of Series A Convertible Preferred Stock shall have conversion rights as follows("Conversion Rights"):(a)	Right to Convert.  Subject to subsection (b), each share of outstanding Series A Convertible Preferred Stock shall beconvertible at any time into shares of restricted common stock ("Conversion Shares") by giving not less than twenty (20) dayswritten notice to the decision to convert.  The conversion date will be the 20th day after the date of the written notice("Conversion Date").The conversion formula for a Series A Convertible Preferred Stock share is the lesser of (i) seventy cents ($0.70), or (ii) the ratedetermined by (x) taking seventy percent (70%) of the average of the closing bid prices of the Company's common stock for thetwenty (20) consecutive day trading period immediately preceding the Conversion Date and (y) multiplying that by the dollaramount of the Series A preferred shares that are being converted.(b)	Mechanics of Conversion.(i)	Before any holder of Series A Convertible Preferred Stock shall be entitled voluntarily to convert the same into sharesof Common Stock, he shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Company or of anytransfer agent for such stock, and shall give written notice to the Company at such office that he elects to convert the same andshall state therein the number of shares to be converted and the name or names in which he wishes the certificate or certificatesfor shares of Common Stock to be issued.  The Company shall, as soon as practicable thereafter, issue and deliver at such officeto such holder of Series A Convertible Preferred Stock, a certificate or certificates for the number of shares of Common Stock towhich he shall be entitled.  Such conversion shall be deemed to have been made immediately prior to the close of business on thedate or surrender of the shares of Series A Convertible Preferred Stock to be converted, and the person or persons entitled toreceive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder orholders of such shares of Common Stock on such date.

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(ii)  	If the conversion is in connection with an underwritten offering of securities pursuant to the Securities Act, theconversion may, at the option of any holder tendering shares of Series A Convertible Preferred Stock for conversion, beconditioned upon the closing with the underwriters of the sale of securities pursuant to such offering, in which event the person(s)entitled to receive the Common Stock upon conversion of the Series A Convertible Preferred Stock shall not be deemed to haveconverted such Series A Convertible Preferred Stock until immediately prior to the closing of such sale of securities.(c)	Adjustments to Conversion Rate for Stock Dividends and for Combinations or Subdivisions of Common Stock.  In theevent that the Company at any time or from time to time after the first date of any issuance of Series A Convertible PreferredStock (the "Original Issue Date") shall declare or pay, without consideration, any dividend on the Common Stock payable inCommon Stock or in any right to acquire Common Stock for no consideration, or shall effect a subdivision of the outstandingshares of Common Stock into a greater number of shares of Common Stock (by stock split, reclassification or otherwise than bypayment of a dividend in Common Stock or in any right to acquire Common Stock), or in the event the outstanding shares ofCommon Stock shall be combined or consolidated, by reclassification or otherwise, into a lesser number of shares of CommonStock, then the Conversion Rate in effect immediately prior to such event shall, concurrently with the effectiveness of such event,be proportionately decreased or increased, as appropriate.  In the event that the Company shall declare or pay, withoutconsideration, any dividend on the Common Stock payable in any right to acquire Common Stock for no consideration, then theCompany shall be deemed to have made. a dividend payable in Common Stock in an amount of shares equal to the maximumnumber of shares issuable upon exercise of such rights to acquire common Stock.(d)	Adjustments for Reclassification and Reorganization.         If the Common Stock issuable upon conversion of the SeriesA Convertible Preferred Stock shall be changed into the same or a different number of shares of any other class or classes ofstock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares providedfor in Section 1(b) above or a merger or other reorganization referred to in Section 1(b) above), the Conversion Rate then ineffect shall, concurrently with the effectiveness of such reorganization or reclassification, be proportionately adjusted so that theSeries A Convertible Preferred Stock shall be convertible into, in lieu of the number of shares of Common Stock which theholders would otherwise have been entitled to receive, a number of shares of such other class or classes of stock equivalent to thenumber of shares of Common Stock that would have been subject to receipt by the holders upon conversion of the Series AConvertible Preferred Stock immediately before that change.(e)	No Impairment.	The Company will not, by amendment of its Articles of Incorporation or through anyreorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action,avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by theCompany, but will at all times in good faith assist in the carrying out of all the provisions of this Section and in the taking of allsuch action as may be necessary or appropriate in order to protect the Conversion Rights of the holders of the Series AConvertible Preferred Stock against impairment.(f)	Certificates as to Adjustments.	Upon the occurrence of each adjustment or readjustment of any ConversionRate pursuant to this Section, the Company, at its expense shall promptly compute such adjustment or readjustment in accordancewith the terms hereof and prepare and furnish to each holder of Series A Convertible Preferred Stock a certificate executed by theCompany's President or Chief Financial Officer setting forth such adjustment or readjustment and showing in detail the factsupon which the Company shall, upon the written request at any time of any holder of Series A Convertible Preferred Stock,furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) theConversion Rate at the time in effect, and (iii) the number of shares of Common Stuck and the amount if any, of other propertywhich at the time would be received upon the conversion of the Series A Convertible Preferred Stock.(g)	Notices of Record Date.	In the event that the Company shall propose at any time: (i) to declare any dividend ordistribution upon its Common Stock, whether in cash, property, stock or other securities. whether or not a regular cash dividendand whether or not out of earnings or earned surplus; (ii) to offer for subscription pro rata to the holders of any class or series ofits stock any additional shares of stock of any class or series or other rights; (iii) to effect any reclassification or recapitalizationof its Common Stock outstanding involving a change in the Common Stock; or (iv) to merge orconsolidate with or into any othercorporation, or sell, lease or convey all or substantially all of its assets, or to liquidate, dissolve or wind up; then, in connectionwith each such event, the Company shall send to the holders of Series A Convertible Preferred Stock:(A)	At least twenty (20) days prior written notice of the date on which a record shall be taken for such dividend,distribution or subscription rights (and specifying the date on which the holders of Common Stock shall be entitled thereto) or fordetermining rights to vote, if any, in respect of the matters referred to in (iii) and (iv) above; and

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(B)	In the case of the matters referred to in (iii) and (iv) above, at least twenty (20) days prior written notice of the datewhen the same shall take place (and specifying the date on which the holders of Common Stock shall be entitled to exchangetheir Common Stock for securities or other property deliverable upon the occurrence of such event).(h)	Reservation of Stock lssuable Upon Conversion.	The Company shall at all times reserve and keep available out of itsauthorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Series APreferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion ofall outstanding shares of the Series A Convertible Preferred Stock; and if at any time the number of authorized but unissuedshares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series A ConvertiblePreferred Stock, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase itsauthorized but unissued shares of Common Stock to such number of shares as shall be sufficient forsuch purpose, including,without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to thisCertificate.(i)	Fractional Shares.	No fractional share shall be issued upon the conversion of any share or shares of Series AConvertible Preferred Stock.  All shares of Common Stock (including fractions thereof) issuable upon conversion of more thanone share of Series A Convertible Preferred Stock by a holder thereof shall be aggregated for purposes of determining whetherthe conversion would result in the issuance of any fractional share.  If, after the aforementioned aggregation, the conversionwould result in the issuance of a fraction of a share of Common Stock, the Company shall, in lieu of issuing any fractional share,pay the holder otherwise entitled to such fraction a sum in cash equal to the fair market value of such fraction on the date ofconversion (as determined in good faith by the Board of Directors).(j)	Notices.	Any notice required by the provisions of this Section 3 to be given to the holders of shares of Series AConvertible Preferred Stock shall be deemed given if deposited iii the United States mail, postage prepaid, and addressed to eachholder of record at his address appearing on the books of the Company.(2)	VOTING RIGHTS.The holder of each share of Series A Convertible Preferred Stock shall have the right to onehundred (100) votes for each share of Common Stock into which such share of Series A Convertible Preferred Stock could beconverted on the record date for the vote or written consent of stockholders.  In all cases any fractional share, determined on anaggregate conversion basis, shall be rounded to the nearest whole share.  With respect to such vote, such holder shall have fullvoting rights and powers equal to the voting rights and powers of the holders of Common Stock, and shall be entitled,notwithstanding any provision hereof, to notice of any stockholders meeting in accordance with the bylaws of the Company, andshall be entitled to vote, together with holders, of Common Stock, with respect to any question upon which holders of CommonStock have the right to vote,(3)	DIVIDENDS.The Company shall accrue (whether or not declared) an annual cumulative eight percent (8%) dividend oneach share  of Series A Convertible Preferred Stock.  Subject to the requirements of Nevada law, the Company shall pay thecumulative dividend in cash or, in its sole discretion, in whole or in part in additional Conversion Shares, at the first to occur of(a) an initial public offering, or (2) conversion of all or part of the Series A Convertible Preferred Stock into Conversion Shares.(4)	STATUS OF CONVERTED STOCK.In the event any shares of Series A Convertible Preferred Stock shall beconverted pursuant to Section 1 hereof, the shares so converted shall be canceled and shall not be issuable by the Company, andall such shares shall be canceled, retired and eliminated from the shares which the Company is authorized to issue.(5)	SENIORITY OF SERIES A CONVERTIBLE PREFERRED STOCK.No additional shares of Series A ConvertiblePreferred Stock shall be authorized or issued that have rights, privileges and preferences equal to or senior to the Series AConvertible Preferred Stock as long as any Series Convertible Preferred Stock is outstanding(6)	LIQUIDATION PREFERENCE.  If the Company is liquidated while the Series A Convertible Preferred Stock remainsoutstanding, then after the Company pays its creditor obligations in full and reserve funds for the cost of liquidation, all availablecash will first be distributed to the holders of Series A Convertible Preferred Stock in proportion to their investment in Series AConvertible Preferred Stock and cumulative unpaid dividends before any distributions are made to the holders of the Company'scommon stock.

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(7)	RESTRICTIONS AND LIMITATIONS.So long as any shares of Series Convertible Preferred Stock remainoutstanding, the Company shall not, without the vote or written consent by the holders of at least a majority of the then outstanding shares of Series A Convertible Preferred Stock, amend these Articles of Incorporation if such amendment would adversely affect any of the rights, preferences or privileges provided for herein for the benefit of the Series A Convertible Preferred Stock.RESOLVED FURTHER, that the Secretary of the Company is hereby authorized and directed to prepare, execute, verify and file, in the office of the Nevada Secretary of State, a Certificate of Designation in accordance with this resolution as required by law.

CONTINAN COMMUNICATIONS, INC./s/  Claude C. Buchert
Date: September 14, 2007Claude C. Buchert, Chief Executive Officer/s/  Helene Legendre
Date: September 14, 2007Helene Legendre, Secretary




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RULE 13a-14(a)/15d-14(a) CERTIFICATION


I, Claude C. Buchert, certify that:1.	I have reviewed this annual report on Form 10-QSB of Continan Communications, Inc.;2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleadingwith respect to the period covered by this report;3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, theperiods presented in this report;4.	The small business issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controlsand procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) [omitted pursuant to extended compliance period]for the small business issuer and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, ismade known to us by others within those entities, particularly during the period in which this report is being prepared;(b) [omitted pursuant to extended compliance period](c) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this reportbased on such evaluation; and(d) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred duringthe small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annualreport) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control overfinancial reporting; and5.	The small business issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internalcontrol over financial reporting, to the small business issuer's independent registered public accounting firm and the auditcommittee of the small business issuer's board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and reportfinancial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the smallbusiness issuer's internal control over financial reporting.

Dated: November 19, 2007
/s/ Claude C. BuchertClaude C. Buchert,Chief Executive Officer




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RULE 13a-14(a)/15d-14(a) CERTIFICATION


I, Helene Legendre, certify that:1.	I have reviewed this annual report on Form 10-QSB of Continan Communications, Inc.;2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleadingwith respect to the period covered by this report;3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, theperiods presented in this report;4.	The small business issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controlsand procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) [omitted pursuant to extended compliance period]for the small business issuer and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, ismade known to us by others within those entities, particularly during the period in which this report is being prepared;(b) [omitted pursuant to extended compliance period](c) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this reportbased on such evaluation; and(d) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred duringthe small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annualreport) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control overfinancial reporting; and5.	The small business issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internalcontrol over financial reporting, to the small business issuer's independent registered public accounting firm and the auditcommittee of the small business issuer's board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and reportfinancial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the smallbusiness issuer's internal control over financial reporting.

Dated: November 19, 2007
/s/ Helene LegendreHelene Legendre,Chief Financial Officer




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SECTION 1350 CERTIFICATION


In connection with the quarterly report of Continan Communications, Inc. ("Company") on Form 10-QSB for the quarter endedSeptember 30, 2007 as filed with the Securities and Exchange Commission ("Report"), the undersigned, in the capacity and onthe date indicated below, hereby certifies pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)that to his knowledge:1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company.

Dated: November 19, 2007
/s/ Claude C. BuchertClaude C. Buchert,Chief Executive OfficerDated: November 19, 2007
/s/ Helene LegendreHelene Legendre,Chief Financial Officer




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